Facebook’s Crypto Project Is Officially Dead

Facebook’s Crypto Project Is Officially Dead
Photo: Jakub Porzycki, Getty Images

Facebook’s long-term stablecoin project, Diem, is finally shutting down. On Monday, an outside investment firm, Silvergate Bank, confirmed it was buying $US182 ($253) million worth of Diem assets from the tech giant, marking the end of a long-coming — and pretty tumultuous — exit.

“Despite giving us positive substantive feedback on the design of the network, it nevertheless became clear from our dialogue with federal regulators that the project could not move ahead,” reads a statement from Diem CEO Stuart Levey on the project’s former website. “As a result, the best path forward was to sell the Diem Group’s assets, as we have done today to Silvergate.”

Facebook’s proposal for Diem — then going by the name “Libra” — first rolled out in the summer of 2019 with the goal of creating a “simple global payment system and financial infrastructure that empowers billions of people.” But because this is a Facebook brand, just about everyone was pretty sceptical; regulators from the EU and the U.S. alike expressed scepticism about the project, with Europe’s antitrust watchdog opening a probe into the effort not long after it was first announced.

Then came headaches from partners. Some of the project’s initial backers, like PayPal, Mastercard and Visa jumped ship following months of regulatory scrutiny, and things only got worse from there. First came the name change, and then came the narrowed scope: what was first supposed to be a globally-supported cryptocurrency became one that was only available in the U.S. after it failed to get approval from Swiss payment regulators. Executives on the team responsible for overseeing Diem’s push into the mainstream, like David Marcus, left the company soon after. The Novi blockchain wallet that Facebook had created to carry the digital currency announced towards the end of last year that it would be trialing payments with Pax Dollars (USDP), instead of Diem like originally planned.

Diem isn’t the only controversial project that Facebook announced is shuttering this week. The same day as the Silvergate announcement, Israeli media first reported that the company was shuttering its Express Wi-Fi project, which had been offering low-cost internet services to regions in India, Indonesia, and other parts of the global south over the past six years. Much like Diem, regulators around the world were sceptical of the wi-fi initiative, with countries like Bangladesh outright banning the program from setting up shop in rural regions out of security and licensing concerns.

An announcement on the Facebook (sorry, Meta) website confirms the shutdown. “After more than five years in operation, we are planning to wind down our Express Wi-Fi program,” the company wrote.

“Together with our partners, we helped expand public Wi-Fi access for people in more than 30 countries via the Express Wi-Fi platform. While we are concluding our work on this program to focus on developing other projects, we remain committed to working with partners across the telecom ecosystem to deliver better connectivity.”