Facebook's stablecoin project "Diem" faces multiple setbacks, reportedly planning to seek a sale to return capital to investors.

Bloomberg reported that Facebook-led stablecoin project Diem (formerly known as Libra) appears to be in trouble, as it is currently trying to sell its intellectual property in order to return capital to investors such as Uber, a16z, Temasek, Spotify, Coinbase, and others.

Diem Project Fails to Launch

A report by Bloomberg citing sources familiar with the matter indicates that Facebook is considering selling its assets, cashing out any remaining value in the Diem project, and seeking a way out for project employees. Discussions are ongoing, but it is still uncertain if Diem can find any potential buyers.

Previously, Diem, formerly known as Libra, faced challenges since its launch in 2019 due to concerns over monopolization, privacy, and economic stability. In April 2020, Libra released a second version of its whitepaper, significantly enhancing its regulatory compliance, and later rebranded as "Diem" in an attempt to shed its negative image.

However, in October last year, Facebook attempted a pilot program using the existing stablecoin USDP Pax Dollar to drive widespread adoption, only to be met with a joint letter from several U.S. senators urging founder Mark Zuckerberg to immediately halt the pilot and commit to never launching the digital currency Diem.

Subsequently, in December, David Marcus, head of Facebook's payment business Facebook Financial, F2, announced his departure, handing over the reins to former Upwork CEO Stephane Kasriel.

Currently, it appears that Facebook may still promote adoption through the digital wallet Novi paired with USDP Pax Dollar. In December last year, they began a pilot program by introducing a digital wallet through WhatsApp.

As of the time of writing, representatives from the Federal Reserve, the Diem Association, and Facebook have not responded, and the source mentioned cannot confirm if Diem will find a buyer.

Update: Ultimately, the crypto-friendly bank Silvergate issued 1.2 million shares of Class A common stock to Diem and paid $50 million in cash, acquiring Diem for a total price of $182 million.