Meta (formerly Facebook)-backed stablecoin project Diem’s intellectual property and assets have been sold to cryptocurrency bank Silvergate Capital Corporation for US$182 million, both entities confirmed on Monday.
Fast facts
- “[W]e identified a need for a U.S. dollar-backed stablecoin that is regulated and highly scalable to further enable them to move money without barriers,” said Silvergate chief executive Alan Lane. “[I]t remains our intention to satisfy that need by launching a stablecoin in 2022, enabled by the assets we acquired today and our existing technology.”
- Silvergate issued roughly US$132 million in Class A shares of common stock plus an additional US$50 million in cash in the acquisition.
- Following the announcement of the Diem project as Libra in 2019, regulators pushed back while conversations around central bank digital currencies (CBDC) accelerated.
- Silvergate subsidiary and California chartered Federal Reserve member bank Silvergate Bank became the exclusive issuer of Diem’s USD stablecoin as the Diem Association relocated its primary operations from Switzerland to the U.S. last year.
- Last November, the U.S. President’s Working Group’s recommendations on stablecoins included that they be issued by “insured depository institutions,” or banks.