Mark Zuckerberg’s effort to create a globally accepted cryptocurrency is over. On Monday, the association behind the Diem cryptocurrency announced it was winding down and selling off the group’s intellectual property.
The cryptocurrency project, previously known as Libra, failed to take off because federal regulators refused to play ball, according to the Diem Association, a nonprofit that Zuckerberg’s Meta helped found in 2019.
“Despite giving us positive substantive feedback on the design of the network, it nevertheless became clear from our dialogue with federal regulators that the project could not move ahead,” the group said in a statement.
The Diem Association didn’t elaborate on the struggles. But the cryptocurrency project may have been doomed from the start due to stiff resistance from regulators. Zuckerberg’s goal with Diem was to create a new blockchain-based currency that people could easily use across their mobile devices, without paying extra fees for currency transfers.
However, US lawmakers and regulators in Europe were concerned the cryptocurrency project would give Zuckerberg’s companies too much power over the global financial system. It also came a year after the Cambridge Analytica scandal, which exposed the personal information of tens of millions of Facebook users.
The struggles to secure regulatory approval eventually caused Zuckerberg's partners on the project—including PayPal, eBay, Stripe, Mastercard and Visa—to bail in less than a year. Last November, Meta also lost its head for cryptocurrency efforts, David Marcus.
Although the Diem Association is dissolving, the group’s cryptocurrency assets will live on. Silvergate, a banking provider that specializes in digital currencies, is buying the intellectual property. “We remain confident in the potential for a stablecoin operating on a blockchain designed like Diem's to deliver the benefits that motivated the Diem Association from the beginning," the Diem Association said. "With today's sale, Silvergate will be well-placed to take this vision forward.”
Meanwhile, Zuckerberg announced Meta is joining the Crypto Open Patent Alliance with the goal of making his company’s cryptocurrency patents available for anyone to use.
Facebook has also been offering a cryptocurrency wallet called Novi. But for now, it only supports a separate stablecoin called the Pax Dollar, which is fully backed by the US dollar.