After Purchasing Diem, Silvergate Capital Plans to Launch its Stablecoin
Speaking at a CNBC program, Silvergate Capital CEO Alan Lane noted on Monday that the organization will launch a stablecoin later this year.
Silvergate Stablecoin
Silvergate CEO Alan Lane’s revelation that his company is planning to launch a stablecoin through its banking subsidiary Silvergate Bank came during his interview on CNBC’s “Mad Money” program hosted by Jim Cramer.
Earlier in the day, the banking organization confirmed that it’s acquiring Diem Association’s IP, assets, and technology for $132 million in stock and $50 million in cash.
“With today’s sale, Silvergate will be well-placed to take this vision forward. Over the coming weeks, the Diem Association and its subsidiaries expect to begin the process of winding down, but we look forward to seeing the design choices – and the ideals – of Diem thrive,” Levey hinted at the future of Diem stablecoin in a new avatar.
In the interview with Cramer, Lane said Silvergate wants to see stablecoins to be used in everyday situations and not merely for trading. Talking about the real worth of Diem stablecoin, Lane said, “We think the potential worth is off the charts when we think about using the blockchain technology for payments and remittance.”
Zuckerberg’s Digital Coin Dream Finally Over
Meta CEO Mark Zuckerberg’s dream of having his cryptocurrency is finally over with the sale of Diem Associates, formerly Lira, for around $200 million to the crypto-focused bank Silvergate. The ambitious initiative that began in 2019 after a meeting with 20-odd investors in Geneva faced regulatory opposition, particularly from US watchdogs.
“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,” Diem Network CEO Stuart Levey said in a press statement on Monday.
Diem had been operating in a pre-launch phase, and Silvergate has acquired the assets, tools, and critical proprietary software related to the development, deployment, and tools.
A Tumultuous Year for Diem
The past year turned out to be highly tumultuous for Diem. In April 2021, reports suggested that Facebook’s stablecoin will be available in the market by the end of 2021.
In May, Diem shifted its headquarters from Switzerland to the US after entering into a strategic partnership with Silvergate Bank. In August, head of digital wallet Novi and board member of Diem Association David Marcus revealed in a blog post that the payment system had received a license in almost all US states.
Despite also renaming the brand from Libra to Diem and changing its general focus to serve as one global payment method, the project overall failed to deliver on its big promise.
