The idea of the company to create a Stablecoin was initially doomed to failure and many lessons can be learned from it, says Jack Dorsey
Former Twitter CEO and Block head Jack Dorsey said at the Bitcoin for Enterprise 2022 conference that there are many lessons to be learned from Meta failed attempt to launch its own stablecoin. According to Dorsey, the company’s venture to create its own Stablecoin was doomed to failure and was a waste of time and resources.
Dorsey felt that Meta main mistake was trying to create its own closed system, instead of using open protocols such as Bitcoin.
“These two or three years, or whatever time it may be, could be spent on making bitcoin more accessible to more people around the world,” said the former head of Twitter.
On February 1, Meta abandoned the issuance of a stablecoin, confirming the sale of assets and intellectual property of its subsidiary Diem Association.
Diem explained that throughout the process of developing their own stablecoin, they actively interacted with regulators and received positive feedback from them. Despite this, it became clear to the developers that the project could not develop further.
Meta planned to release its own stablecoin in the first half of 2020, but abandoned these plans due to warnings from regulators. At the same time, the company rebranded the project, changing the name of the stablecoin from Libra to Diem.
In 2021, Diem founder David Markus left Meta and the project entered into a partnership with Silvergate Capital Corp. to issue their own stablecoin.
According to Fortune sources, the US Federal Reserve told Silvergate Bank, which is owned by Silvergate Capital and was supposed to be the issuer of Diem USD, that they are concerned about the issuance of a stablecoin and cannot approve it. Due to pressure from the regulator, Silvergate Bank refused to issue a stablecoin, sources say.