Crypto bank Silvergate Capital Corporation purchased the Meta-backed stablecoin project Diem’s intellectual property and assets. The sale was worth $182 million.
Alan Lane, the chief executive of Silvergate, stated:
“[W]e identified a need for a U.S. dollar-backed stablecoin that is regulated and highly scalable to further enable them to move money without barriers. [I]t remains our intention to satisfy that need by launching a stablecoin in 2022, enabled by the assets we acquired today and our existing technology.”
Silvergate issued about $132 million in Class A shares of common stock and $50 million in cash for this purchase.
After Meta (then Facebook) announced the Diem (then Libra) project in 2019, regulators positioned themselves against it.
Silvergate Bank was already the exclusive issuer of Diem’s USD stablecoin after the Diem Association decided to relocate to the US from Switzerland in 2021.
In late 2021, the US President’s Working Group recommended that stablecoins should be issued by “insured depository institutions” or banks.