Silvergate Bank announced today that it has acquired intellectual property and other technology assets related to running a blockchain-based payment network from Diem, the stablecoin project launched by Facebook (now Meta) in 2019.
Silvergate said it issued $132 million of Class A common stock for the Diem project and paid $50 million in cash.
It was rumored that the Diem (formerly Libra) project, which has been subjected to harsh pressures from the regulators since its first release and did not go as expected, is planned to be sold in the past few days.
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Stuart Levey, CEO of Diem Networks, continued:
“I am extremely proud of the efforts of our members, partners and teams who have worked tirelessly to develop the Diem Payment Network with strong controls to protect consumers and fight financial crime.
We are confident in Silvergate’s ability to move Diem technology forward and transform the future of payments.”
Silvergate Bank CEO Alan Lane, who partnered with and was familiar with the Diem project last year, said the bank needed a dollar-backed stablecoin that was both regulated and highly scalable:
“We are grateful to Diem and the community of engineers and developers who created this technology and brought it to its current evolution.
In conversations with our customers, we identified the need for a regulated and highly scalable US dollar-backed stablecoin.
In this context, we continue to intend to meet this need by launching a stablecoin in 2022, thanks to the assets we have acquired today and our current technology.”