Meta Is Exploring Stablecoin Payments Again, Nearly Three Years After Diem's Demise

Meta is exploring stablecoin payments again for its platforms, nearly three years after regulators halted the company's Diem digital currency project.

Meta is reportedly exploring stablecoin payments again for its platforms, nearly three years after regulators halted the company’s flagship Diem digital currency project.

The fresh discussions come as institutional interest in stablecoins surges amid broader cryptocurrency market volatility. In the U.S., regulatory conditions for crypto are also shifting following the Trump administration.

Meta’s Diem Project Hit Regulatory Snag

Launched in 2019 as Libra and later renamed Diem, the project aimed to create a blockchain-based payment network to improve financial inclusion. Backed by Meta, the Diem Association developed a travel-rule compliant stablecoin with strict controls, including a ban on anonymous transactions.

Diem CEO Stuart Levey noted how the team applied industry-novel compliance measures and that regulators praised the project’s design. However, despite these efforts, Meta encountered ongoing pressure from federal regulators, including the FDIC, to discontinue the project.

As such, the project faced significant delays, and in January 2022, the Diem Association sold its intellectual property and technical assets to Silvergate Capital (NYSE: SI) for $182 million. Silvergate planned to use the acquired technology to issue its own stablecoin.

However, Silvergate’s strategy was later subject to scrutiny following the bank’s 2023 collapse. Crypto analyst MartyParty claimed that Meta was “forced” to abandon Diem. He suggested that the Silvergate deal ultimately contributed to the bank’s failure, sparking questions about the regulatory pressures that led to the project's termination.

Now, a recent report by Fortune indicates that Meta is once again engaging with crypto firms to integrate stablecoin payments on its platforms.

According to internal sources, the company is planning a multi-token approach. Its considerations reportedly include Circle’s USDC and Tether’s USDt, but no final decisions have been made yet.

Moreover, Fortune noted that Meta is exploring ways to leverage stablecoins for more efficient cross-border payments. The report also mentioned the recent appointment of former Ripple executive Ginger Baker as vice president of product at Meta.

As part of these efforts, Meta is reportedly in talks with blockchain companies to address issues related to high fees and processing times.

These developments come amid a broader industry trend towards integrating stablecoins for payments. Earlier this month, Stripe launched stablecoin-based accounts in over 100 countries, while Visa announced an investment in stablecoin startup BVNK.

Stablecoin market capitalization has since soared to over $230 billion, highlighting the growing interest and activity in this segment of the cryptocurrency industry.