Meta Platforms Inc. FB is winding down its Diem cryptocurrency project and selling its technology to cryptocurrency-focused bank Silvergate Capital Corp. SI for about $200 million, the Wall Street Journal reported, citing a person familiar with the matter.
What Happened: It was reported earlier by Bloomberg that Meta CEO Mark Zuckerberg is exploring a sale of Diem.
Diem, unlike the apex cryptocurrency Bitcoin BTC/USD, was proposed as a so-called stablecoin.
Meta’s choice of Silvergate as the issuer of the Diem stablecoin had met with stiff resistance from the U.S. Federal Reserve and dealt the Diem project “a final blow,” as per the Bloomberg report.
See Also: How To Buy Bitcoin (BTC)
Why It Matters: The sale represents efforts by Meta to find a way to potentially return capital to investors in the Diem project, which has faced several setbacks since its inception in 2019.
Silvergate is a portfolio company of Cathie Wood’s Ark Investment Management, which has recently been acquiring shares in several cryptocurrency-related stocks.
Wood's firm anticipates Bitcoin to hit $1 million by 2030 and Ethereum ETH/USD cross $20 trillion in market capitalization within the next 10 years.
Price Action: Meta Platforms shares closed 1.8% lower in Wednesday’s regular trading session at $294.63, but rose almost 0.5% bin the after-hours session to $295.98.
Silvergate Capital's shares closed 2.5% lower in the regular trading session at $99.48, but rose 2.4% in the after-hours session to $101.88.
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