Diem

Diem, initially launched as Libra in 2019, was a high-profile but ultimately defunct financial technology project spearheaded by Meta Platforms (formerly Facebook). The project’s stated mission was to construct a more inclusive and efficient global payment system on a permissioned blockchain, primarily targeting unbanked and underbanked populations. The initiative was managed by the Diem Association, an independent, non-profit membership organization headquartered in Geneva, Switzerland, and comprised of companies from the technology, e-commerce, telecommunications, and venture capital sectors.

The project was formally announced in June 2019 with creators listed as Morgan Beller, David Marcus, and Kevin Weil. It immediately attracted significant global attention and scrutiny from government regulators and central banks who raised concerns about its potential impact on monetary sovereignty, financial stability, and data privacy. This intense regulatory pressure led several initial high-profile members, including Visa, Mastercard, PayPal, and eBay, to withdraw from the association. In an effort to distance itself from the initial controversies and signal a fresh start, the Libra Association rebranded to the Diem Association in December 2020. The project's scope was also narrowed from a multi-currency-backed stablecoin to a single stablecoin pegged to the U.S. dollar.

The core of the offering was a stablecoin, a type of cryptocurrency designed to maintain a stable value by being backed by a reserve of assets, such as cash and short-term government securities. This was intended to provide a low-volatility digital currency suitable for everyday transactions and cross-border remittances. The system was built on an open-source protocol to encourage a developer community to build services on the network. Operations were to be managed through Novi, a digital wallet subsidiary created by Facebook. Despite numerous strategic pivots, including relocating its primary operations to the United States and partnering with Silvergate Bank to issue the Diem USD stablecoin, the project could not secure the necessary regulatory approval to launch. In January 2022, the Diem Association announced it was winding down operations and selling its intellectual property and other assets to Silvergate Capital for approximately $182-$200 million. Silvergate itself ceased operations in March 2023.

Keywords: Diem Association, Libra, stablecoin, blockchain payment system, digital currency, financial technology, Meta, Facebook, David Marcus, Novi wallet, cross-border payments, financial inclusion, regulatory scrutiny, Silvergate, cryptocurrency, digital wallet, payment network, permissioned blockchain