The Tale of Vale Diem: How Facebook’s Enterprising Stablecoin Initiative Ended

On the 31st of January, 2022, Meta, previously known as Facebook, declared that it will be withdrawing from Diem, its stablecoin project. According to Meta, all intellectual properties and various sets of the project were bough by the Silvergate Capital Corporation. This essentially means the end of the road for Mark Zuckerberg considering the present situation. Visit at: bitcoinboom.app

This development also marked the end of a once though groundbreaking project which was pitched with the promise of being a worldwide alternative to fiat currency. Here’s how the project went from the very first announcement to shutting down.

The First Phase :The white paper

The news about Facebook planing to launch its virtual token hit the general public and stirred a lot of admiration and optimism for the brand. On the 18th off June 208, the brand issued its white paper that discusses the chances of a global currency dubbed Libra. The currency was said to be backed on the operational angle by its very own block chain while on the financial angle, backed by short-term government securities and band deposits.

Since the beginning of the project, Libra never pretended to be a decentralized currency. In fact its mechanism of governance was modeled as a consortium featuring top firms like Pay Pal, Visa, Mastercard, eBay, Stripe, Andreessen Horowitz, Coinbase and Uber. With the project being the brain child of Facebook, the brand was charged to maintain the role of leadership. The social media giant also had plans to strengthen its influence and also establish a wallet dubbed Calibra.

At the onset, the project’s position was to serve as a payment tool rather than a speculative asset. The mining of the tone a was linked to a buyout process by sanctioned reseller chosen among the members of the association.

The Second Phase: Regulatory pushback

In just one month the Senates of the United States we’re able to get David Marcus, the co-founder of Libra to testify against Facebook at a a special hearing. Senator Pat Toomey and Senator Sherrod Brown we’re able to fervently grill Marcus by asking him some series of hard question. At that time the news surrounding the private currency Facebook was planning to launch didn’t evade the then-President Donald Trump, who wasn’t thrill about the development.

The pushback to private currency did not only come from the U.S government. The Finance Minister of France, Bruno Le Maire in September 2019, announced that France and other countries in Europe are against new project brought forward by Facebook. The French Finance Minister started that the new development from Facenook puts at stake the sovereignty of all the states.

The following week, the Bank of England declared. That Libra would have to go through rigorous processes and meet all of its requirements for it to become legal in the UK. Following this statement, the first wave of backups ensure with several brands leaving the association. Companies like eBay, Visa, Pay Pal, Mercado Pago, and Mastercard quit on the project. However, the speakers for Facebook we’re able to lay down the events that ensued to buy more time.

In October 2019, France, Italy, Germany, Netherlands, and Spain created an official agency to deter Libra from launching im Europe. The pressure eventually grew and heightened to the point where Ralph Hamers, the CEO of the biggest bank in Netherlands publicly declared to cut ties with Facebook.

The ThirdPhase 3: The rebranding that failed to help

Facebook reacted to pressure again as it decides to rebrand coming back once again wijt Linra 2.0. The white paper was modified and introduced four primary changes to tackle all regulatory concerns. The white paper explained that the project will be switching from a singe currency to a group of stablecoins backed by Euro, Pounds, and U.S dollar.

Other changes also involved improved compliance structures and switch to permissionless blockchain in the space of five years.

On the 1st of December 2020, proceed win technical adjumrtes changing the brand name from Libra to Diem while Calibra was changed to Novi. The change of name came just after reports confirmed the launch of the first stablecoin backed by the USD.

During this period, the G7 were still much against the second project with many believing the rebrand is all suspicious all together. The camel’s back eventually broke when Facebook launched the Novi Digital Wallet and a group of five senators attacked the project just few hours after the launch. The senators demanded an immediate discontinuation of the project.

Eventually, the head of Novi, Marcus, Diem’s co-founders Kevin Weil and Morgan Beller all departed and left the project and project was unable to come back from that.

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