Crypto banking group Silvergate Capital further cooled its stablecoin ambitions last week, slashing the value of assets that it purchased from a defunct Facebook crypto project.

Silvergate disclosed that it took a $196 million impairment charge during its final fiscal quarter of last year, writing down the value of intellectual property and technology that it acquired from Diem Group early last year.

The revised figure represents a 98% loss compared to the $200 million it paid for the assets. Silvergate had planned to launch a stablecoin using the assets last year, announcing plans to do so in its third fiscal quarter of 2021.

The company said it planned to integrate the assets it got from Diem into its Silvergate Exchange Network (SEN), an around-the-clock system for transferring money used by its institutional clients. Silvergate said last week, however, that the stablecoin’s launch is firmly on hold.

“Given the significant changes in the digital asset industry landscape, this charge reflects the Company’s belief that the launch of a blockchain-based payment solution by Silvergate is no longer imminent,” the company reported.

Company Chief Executive Alan Lane wrote that the impairment charge was because it would be difficult to bring a stablecoin to market “anytime soon,” citing the current crypto environment.

Michael Perito, managing partner at investment bank KBW, described the impairment charge Silvergate took on its Diem assets as part of the typical accounting process companies take in reviewing intangible assets.

“You need to be able to have a reasonable estimate as to when something might turn tangible, and I think the regulatory backdrop in the crypto world right now is just really uncertain,” he told Decrypt. “Near term, Silvergate investors probably shouldn't get their hopes up that a stablecoin project is going to launch.”

The company also reported a 68% drawdown on its deposits during its final fiscal quarter of last year, as well as a $718 million loss on debt liquidated to fulfill the flurry of withdrawals. Additionally, the bank disclosed it would cut its headcount by 40%.

Following the update, Silvergate’s stock price plummeted. It closed out the trading day 43% lower than the day before at $12.57 per share.

Lane had previously pumped the brakes on Silvergate’s stablecoin launch last October, advising it appeared unlikely to happen within the year.

“We are certainly disappointed that it looks like we are going to miss our goal of launching it [the stablecoin] this year,” Lane said. “The technology that we acquired earlier this year was ready to go when we acquired it.”

Following his comments, The bank’s stock price slumped 23% in the following trading day to $54.71, pulled down in part by poor earnings performance. Silvergate reported earnings-per-share of $1.28 for the quarter compared to analyst expectations of $1.46.

Facebook had intended to launch Diem, originally announced as Libra in 2019, as a stablecoin that was tied to a basket of global currencies. Instead of being pegged to the dollar’s price like other stablecoins like Tether or Circle’s USD coin, the token could’ve essentially become its own global currency.

But Libra faced scrutiny from regulators in the U.S. and Europe. Facebook Chief Executive Mark Zuckerberg said his company would abandon the project if regulators didn’t approve of it before the U.S. House Financial Services Committee in October of 2019.

While Silvergate did not put forward a timeline for launching its stablecoin during its recent business update, Lane said the company was not abandoning Diem, unlike Facebook eventually did after partners such as Mastercard, Visa, and eBay pulled out.

“There are still people on the project,” Lane said. “As we sit here today, we will obviously have to continue to evaluate.”

A spokesperson for Silvergate told Decrypt the company would not comment about Diem beyond information published last week.

Even though the company’s project remains in limbo, JP Morgan analysts highlighted the stablecoin’s potential to bolster long-term earnings for Silvergate in a recent research note.

“While we are not surprised that the company is delaying the launch of a stablecoin given a need to manage expense levels down, this remains an area where we remain very bullish,” it stated.