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Facebook-backed Diem cryptocurrency project shuts down after pushback from regulators

Rebranding and restructuring efforts couldn’t save the Diem stablecoin which faced staunch opposition right from the start.

The Facebook-backed Diem cryptocurrency project has called it quits after nearly three years of fighting to stay alive. The decision was made after it "became clear from our dialogue with federal regulators that the project could not move ahead.  As a result, the best path forward was to sell the Diem Group's assets, as we have done today to Silvergate," Diem CEO Stuart Levey said in a press statement. This is a significant setback for Facebook (now Meta), but the result doesn't come as a surprise as Diem faced multiple challenges in the last two years, specifically from lawmakers and regulators around the world who were worried about the impact the currency will have on the financial system and the control that central banks assert over money. Libra to Diem: A timeline The launch of Libra: Facebook, in 2019, brought various startups and financial services giants together to create a stablecoin called Libra and a wallet called Calibra for it. However, after facing massive opposition from regulators around the world, many companies including PayPal, Visa, and Mastercard decided to withdraw from the project forcing the association to go through a complete makeover. Rebranding as Diem: In December 2020, Libra Association announced that it will now be called the Diem Association as part of Facebook's attempt to rebrand, restructure, and distance itself from the project. While Libra was supposed to be backed by a basket of global currency, Diem was meant to be pegged to the US dollar. “I believe that this is something that…

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