Report: No More Zuckerbucks - Facebook's Cryptocurrency Project Seems to Be Shutting Down
According to recent reports, the Facebook-sponsored cryptocurrency project Libra appears to be shutting down.
The Verge reports that two years since it was first announced, Facebook’s cryptocurrency project Libra seems set to shut down. Bloomberg recently reported that the group set up by Facebook to oversee and manage the cryptocurrency, The Diem Association, is reportedly looking into a sale of its assets after facing significant pushback from regulators over the crypto project.
(AP Photo/Mark Lennihan, FIle)
Mark Zuckerberg introduces Meta (Facebook)
According to Bloomberg, the U.S. Federal Reserve put a final stop to the project by putting pressure on the banking partner that Diem partnered with to launch the token. The banking partner, Silvergate, also allegedly faced pressure from the Federal Reserve, causing the bank to reconsider the partnership.
Michael Crittenden, a Diem Association spokesperson, claimed that recent reports from Bloomberg and the Verge contained “some factual errors,” but did not clarify what these were. Unsurprisingly, a mass sell-off of assets could be a major indication that the cryptocurrency is failing.
The initial plan for Libra was that it would be a cryptocurrency backed by a number of real-world currencies. But regulators quickly stepped in to put an end to this plan, so the association pivoted to connect the Diem token directly to the U.S. dollar. This still did not appear to be enough for regulators.
Another sign that the Diem project may be dead is that Facebook recently launched a digital wallet that was originally built for Diem with another cryptocurrency from Paxos. David Marcus, the executive behind Libra and leaders of Facebook’s digital wallet, also left the company last year after most of the founding team members of Diem also quit.
Read more at the Verge here.