Facebook is selling the technology for its cryptocurrency project known as the Diem Association after the project proved to be unsuccessful.
The technology will be sold to Silvergate Capital Corp., a small bank in California that works with bitcoin and blockchain companies, for about $200 million, according to WSJ.
The bank and Diem previously reached a deal to issue some of the stablecoins, which are considered to be less volatile and are backed by hard dollars. That deal was part of an effort to revamp the project to satisfy regulators, the Journal added.
The project, initially called Libra, was met with challenges from its start.
At the end of 2020, the project changed its name from Libra to Diem Association to reflect adjustments made by its designers to “meet regulatory expectations.”
It was originally pitched as a simple way for users to spend money and had partners like PayPal, Visa and Stripe. Those partnerships were both intended to show that the finance industry was in on the venture and to distance the project from Facebook amid other criticisms about the social media platform policing its site, according to the newspaper.
But officials, including Federal Reserve Chairman Jerome Powell, still voiced concerns surrounding the platform’s ability to provide security and privacy. There was also concern about the platform being used by money launderers and terrorist financiers, the Journal noted.
In October of 2019, Facebook CEO Mark Zuckerberg told U.S. House lawmakers he would support delaying the incoming cryptocurrency pending the approval of all U.S. regulators.
“Some have suggested that we intend to circumvent regulators and regulations,” Zuckerberg said at the time in prepared testimony. “We want to be clear: Facebook will not be a part of launching the Libra payments system anywhere in the world unless all US regulators approve it.”