Facebook has been under criticism for the influence it has had on society for years. Despite that, in June 2019, the social media company announced its most progressive idea of a global cryptocurrency platform called Libra, which was to be backed by multiple different associations. The vision was to provide financial services to the underbanked and to expand the company’s mission of connecting the world, by entering the market of digital money.
The project, renamed Diem last year, was supposed to launch within less than a year but it has been facing heat from the lawmakers ever since its disclosure. The setbacks and regulatory measures made it impossible for the company to get off the ground.
On Monday, the Diem Association made it official that it would dissolve and sell all the assets related to running its much-awaited project, to Silvergate Capital Corporation, in a deal worth $182 million.
When it came to preventing issues such as crime and abuses of user data, Facebook has always been under a microscope and has even dealt with lawsuits. This was one of the biggest reasons why lawmakers, regulators, and other financial services industry watchers were skeptical about Meta running a cryptocurrency platform.
Diem Association CEO Stuart Levey stated, “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.”
The project was complicated from the start. The concept behind Libra was to make transferring and receiving money easier and cheaper. It was to be backed by currencies like the euro and dollar and could be accessed through digital wallets. Regulators and lawmakers, especially in the US, were immediately unsure of a new currency that will be available to the billions of Facebook users.
Not only was Libra a potential threat to other currencies, but it could also have been an enabler to cybercrimes and compromise user privacy. If they had gone through with the idea, Facebook would be even more powerful.
Months after the idea was proposed, a Texas Democrat, Rep. Sylvia Gracia stated, “We need to get the message loud and clear to (Facebook CEO and co-founder Mark Zuckerberg that he’s not a country on his own and he cannot always have it his way”
Despite the amends, Facebook tried to make in order to launch Libra, there were far too many complications and threats concerning this idea so they finally had to call it off.