After nearly three years of working on it, Meta (Facebook’s parent company) ended up giving up its virtual currency project. A victory for central banks, regulators, and policymakers.
In the pipeline since 2019, Meta’s virtual currency project will ultimately never see the light of day. After a lot of arm wrestling with his detractors and other opponents, Mark Zuckerberg ended up throwing in the towel and giving up his digital currency.
No virtual currency for Meta
It all starts in June 2019 with Libra. Meta, finally Facebook at the time, wants to offer a new method of payment, outside of traditional banking circuits. Libra was to make it possible to buy goods or send money as easily and quickly as sending an instant message today.
Very quickly, this project raised many questions and concerns from regulators. To ease their concerns about a currency run by a private company, Meta gave the baby to Diem, an independent Swiss association, at the end of 2020. But that was not enough.
Big names like Paypal, Mastercard, or Visa have left the ship in the meantime. For their part, regulators still do not really trust Meta. The fact that a GAFAM company is launching its own virtual currency has terrified the crowds. Central banks, regulators, and political decision-makers were worried about the stability of the financial system, the risks of money laundering, and the protection of personal data.
Despite a promise of transparency and stability of the cryptocurrency, Meta has had to revise its ambitions downwards over the months. Exit the idea of a cross-border digital currency, Meta was ready to back the stable coin ( or should I say pegged cybertoken? ) to the dollar. Again, this was not enough for the opponents. After a final refusal from the American central bank, Mark Zuckerberg finally decided to bury his virtual currency project. Even as the company launched the first test of its Novi crypto wallet last October.
Thus, the Diem adventure, ex-Libra, ends with the sale of intellectual property rights and other assets and patents of the association. It is Silvergate Capital Corporation, a bank specializing in digital currencies, which recovers the project for the modest sum of 182 million dollars, or approximately 162 million euros.
But we imagine that Mark Zuckerberg and Meta will not give up completely. And that they have more than one trick up their sleeve. With the implementation of the famous metaverse, nothing is impossible