The Diem Association has read the writing on the wall and called it quits, confirming on Monday it will sell off its Diem Payment Network assets.
It explained that the decision was made after it "became clear" that federal regulators would not allow the project to move ahead.
In making the announcement, the association said it will sell those assets to Silvergate, a crypto-focused bank it was working with last year to launch a stablecoin pegged to the US dollar, for $200 million.
"We remain confident in the potential for a stablecoin operating on a blockchain designed like Diem's to deliver the benefits that motivated the Diem Association from the beginning. With today's sale, Silvergate will be well-placed to take this vision forward," Diem Networks CEO Stuart Levey said.
The sale marks the end of Meta's controversial journey to build a new digital currency. The Diem Association had launched in 2019 with the goal of creating a global currency based on blockchain technology and a digital wallet on the same system.
Almost immediately after its announcement, however, regulators worldwide expressed concerns about the privacy risks posed by the association's digital currency and infrastructure.
Numerous backers of the project, including eBay, PayPal, Mastercard, Visa, and Stripe then proceeded to drop out of the payments network shortly after too.
Over the next three years, the association would undergo a rebrand from Libra to Diem while continuing to face the same type of scrutiny from regulators. The digital wallet, Novi, then pivoted to use USDP as its currency rather than the Diem association's stablecoin.
Alongside the sale, Meta on Monday also became a member of the Crypto Open Patent Alliance (COPA) and, in doing so, pledged to not enforce its core cryptocurrency patents, effectively making its Diem Association patents freely available.
While Meta has sold off Diem's core assets, former Diem Networks CEO David Marcus and Diem co-creator Christian Catalini both tweeted their hopes that Silvergate now being responsible for the project would mean it sees less regulatory pressure.
"Here's to yet another chapter with a maybe more 'acceptable' promoter driving the vision forward," Marcus said.
"Today we pass the baton to Silvergate. They have been one of the first Federal Reserve member banks to understand the potential of crypto, and are now in a great position to bring a stablecoin to market that follows the PWG framework," Catalini added.