Hello and welcome to the latest edition of the Overbit Weekly Round Up.
According to a Bloomberg story published Wednesday morning, the Diem Association, which controls the development of the Diem digital currency, is considering selling its assets to restore funds to its investors. The Diem Association's spokeswoman declined to comment.
People may remember 'Diem' by its original name 'Libra', Facebook and Zuckerberg's first attempt at launching a digital currency. It has since rebranded, of course, and now it seems it is falling to the wayside.
Diem is said to be talking with investment bankers about the next steps, including how to sell its intellectual property and capture any remaining value. The talks are reportedly still in the early stages, though, and Diem is not sure to find a buyer.
Since it was initially unveiled in June 2019, Zuckerberg's ailing crypto project has been plagued by controversy.
The original goal for Zuckerberg's stable coin was to create a worldwide currency backed by a basket of major currencies and government debt.
Central bankers and politicians reacted angrily to the concept, fearing that it would promote criminal activities like money laundering and privacy invasion and serve as a powerful competitor to sovereign currencies like the US dollar.
Following regulatory opposition, the troubled project shifted its focus to launching many stablecoins, each pegged to a fiat currency, as well as a multi-currency token. The cryptocurrency's aim was eventually whittled down to Diem USD, a US dollar-backed stable coin. The project has also had a tangled line of ownership and an exodus of corporate partners and high-ranking executives.
To close out the week, we take a look at the latest Federal Open Market Committee (FOMC) meeting, which covers high-level objectives for fiscal policy in the United States and how the markets reacted.
On Wednesday, the Dow Jones Industrial Average dropped in choppy trade after Federal Reserve Chairman Jerome Powell said the central bank had plenty of flexibility to hike interest rates without harming the economy.
After Powell remarked at a press conference that there was "quite a bit of room" to raise interest rates before hurting the job market, stocks fell off their highs, and Treasury yields soared.
After Powell's remarks, the benchmark 10-year Treasury rate surged above 1.8 per cent, as traders interpreted them to suggest the central bank will be more proactive in tightening policy, despite the markets' upheaval in January.
"After hearing Fed Chair Powell talk, it became clear the risk of more rate hikes was elevated and the earlier Wall Street rally fizzled," Oanda's Edward Moya said in a note.
Following its policy group's January meeting, the Fed hinted in a statement that a quarter-percentage-point hike in its benchmark short-term borrowing rate might happen as soon as March.
"With inflation well above 2% and a healthy labour market," the Federal Open Market Committee stated, "the Committee anticipates it will be appropriate to raise the target range for the federal funds rate soon."
As Powell spoke, the market began to gyrate, following a trend of market volatility this week.
"Jay does not want to be remembered as the Fed chair who sullied 40 years of inflation-fighting reputation by getting too nice with the labour market, and I believe that's what we're saying today. He is highly worried about the need to reduce inflation. He's apprehensive about it," said David Zervos, chief market strategist at Jefferies, on CNBC's "Closing Bell,". "He thinks it will happen, but he's not going to take any chances."
This concludes this week's edition of Overbit Weekly Round Up. Thank you so much for reading, and until next time!