Facebook Crypto Appears Before It Starts

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The dream of creating a global cryptocurrency for Facebook or Meta as it is now called will not come true. Facebook’s cryptocurrency, called Libra and later renamed Diem, was sold to Silvergate Capital for $182 million, which includes intellectual property and other assets.

Facebook Crypto Appears Before It Starts

When Facebook announced its Libra cryptocurrency in 2019, the company was dealing with the Cambridge Analytica fallout as well as other issues such as call and text data collection. So regulators, lawmakers, and financial industry watchdogs had concerns about Libra.

But lost in the hysteria of the moment, Libra was a stable coin pegged to the dollar. This meant that it wouldn’t have the wild swings of regular cryptocurrencies. Nevertheless, the company could not overcome the negative press, hence the sale.

In a statement, CEO of Diem Networks US (“Diem”), Stuart Levey, said: “While we have provided positive feedback on the design of the network, it has nonetheless been clear from our dialogue with federal regulators that the project could not go ahead. Accordingly, the best course of action was to sell the Diem Group assets, as we did today at Silvergate.

If implemented correctly, Diem would have provided an invaluable service to businesses, underbanked people and communities around the world. As Levey added in the statement, the goal was to “…provide substantial benefits to consumers and businesses, as well as a payment solution for those who are currently underserved or completely excluded from the traditional financial system.”

Meta will have to find a currency that he can use freely in the world and in his Metaverse. We’ll have to wait and see how the company navigates regulators and consumer acceptance for its next iteration of its cryptocurrency.

What are Stablecoins

The goal of stablecoins is to provide price stability by backing their coins with a reserve asset. It can range from the US dollar to the price of a commodity like gold. The need for stablecoins is important in a digital ecosystem. Indeed, people and businesses who simply want to transact using the instant processing, security, and privacy of cryptocurrency technology can do so without worrying about volatility.

As more people become aware of stablecoins, small businesses and individuals will start using them to pay or receive funds securely. And with short-term volatility out of the way, it will be like sending any other currency.

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