Meta Withdraws Cryptocurrency 'Libra' Project Amid Regulatory Pressure

(Photo by The Verge)

[Asia Economy Reporter Yujin Cho] Meta (formerly Facebook) has completely withdrawn from the cryptocurrency 'Libra' project after facing resistance from regulatory authorities worldwide.

On the 27th (local time), according to The Wall Street Journal (WSJ), Meta is liquidating the cryptocurrency development project 'Diem Association' and selling its technology assets to Silvergate Capital, a Bitcoin and blockchain-related service provider, for $200 million (approximately 240 billion KRW).

Meta initially planned to issue cryptocurrency through Silvergate Capital, a California-based financial firm, but the project was derailed after failing to obtain approval from regulatory agencies.

Meta, which entered the cryptocurrency business in 2019, planned to launch Libra, a cryptocurrency pegged to safe assets such as the dollar and euro.

The Libra launch plan, which aimed to create a currency that could be used globally for remittances and payments without going through banks, faced strong opposition from governments and central banks worldwide after its announcement in June 2019. Eventually, the project shifted direction to scale down to a stablecoin pegged only to the dollar.

However, concerns from the U.S. central bank and regulatory authorities about the potential misuse of cryptocurrency for money laundering or terrorist financing, as well as vulnerabilities in financial stability and personal data protection due to previous lax data management, slowed the project's progress.

As regulatory hurdles hindered smooth progress, Meta gathered participating companies to oversee the project through the Libra Association instead of controlling Libra alone. However, early participants such as Visa, Mastercard, and PayPal withdrew midway, leading to the project's collapse.

The final blow came when David Marcus, a former PayPal executive who had been leading Meta's cryptocurrency development, left the company at the end of last year. Foreign media reported that with operating partners announcing their withdrawal and key personnel leaving, the winding down of the Libra project was an inevitable outcome.

This content was produced with the assistance of AI translation services.