Silvergate has confirmed that it is purchasing all the assets and technology from Diem, a Stable coin platform of Meta Platform, formerly known as Facebook.
Diem has mentioned in an interview that it will start the process of winding down its business as well as the business of its subsidiaries within the next few weeks.
Silvergate, on the other hand, has mentioned that it is acquiring the blockchain-related payment system, operational, development and deployment tools of Diem for applications and remittances.
The company mentioned that Diem had faced several difficulties since its first launch in June 2019. It was rumored that the company would need to shut down its business to pay off the investors.
CEO of Diem, Stuart Levey, has mentioned in a statement that the senior federal has opined that Diem was the most well-designed stable coin project. Yet, they were confident that the project would not succeed and would not be launched.
Silvergate has issued class A common shares for $132 million and $50 million in cash for the acquisition process. Right now, the share price of Silver Gate is standing at $107.74, which showcases a 13. 4% increase.
Silvergate had initially entered a partnership with Diem to launch a dollar-backed Stablecoin. The terms of the agreement mentioned that Silvergate would manage the reserve and the issuance of stablecoins. However, there was subsequent resistance from the federal banking regulator, which led to its failure in the first place.
Alan Lane, the CEO of Silvergate, has mentioned that the company is still focusing on ensuring an open-source community that supports technological innovations. The company is also confident that contributors will be excited about the organisation’s vision. He also stated that the bank needed dollar-backedstablecoin that will be highly scalable and regulated. Silvergate is thinking about launching such a stablecoin by the end of this year.