Diem Association Confirms Payment Network Asset Sale To Silvergate

According to Diem Association and Silvergate announcement, Silvergate Capital Corporation will acquire the Diem Payment network’s intellectual property and other assets.

The assets include development, deployment and operations infrastructure and tools for running a blockchain-based payment network, Silvergate announcement detailed. They will also get “proprietary software elements critical to running a regulatory-compliant stablecoin network.”

A partnership between Diem and crypto bank Silvergate was announced back in May 2021, when Diem left Switzerland for the US after two years of regulatory concerns. Silvergate’s interest in Diem partnership was that it could present opportunities for monetization in the stablecoin space.

Diem, which was initiated as Libra back in 2019, has faced a long and ongoing battle with regulators and legislators who were hesitant about a stablecoin with ties to the then Facebook – now Meta. US regulators raised concerns over the project’s intentions, and Congress had brought in Diem co-creator David Marcus and Mark Zuckerberg to testify on the project.

In October, five senators issued a letter to CEO Mark Zuckerberg, and called to shutdown Diem and Novi, a crypto wallet intended to hold Diem. 

Stuart Levey, Diem Networks US CEO commented on the asset sale:

“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. As a result, the best path forward was to sell the Diem Group’s assets, as we have done today to Silvergate.”