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United States Treasury Secretary Janet Yellen supposedly convinced Federal Reserve Chair Jerome Powell into killing the project, the former Meta executive said.
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The former head of Meta’s (then Facebook’s) blockchain payments solution, Diem, has revealed the project ended after insurmountable political pressure from United States regulators.
“There was no legal or regulatory angle left for the government or regulators to kill the project. It was 100% a political kill—one that was executed through intimidation of captive banking institutions,” Diem co-creator David Marcus said in a Nov. 30 X post.
Meta’s Diem (formerly known as Libra) aimed to develop a decentralized payments network with a US dollar-integrated stablecoin when it launched in June 2019. It received support from the likes of Visa and PayPal — where Marcus previously served as President.
“It would’ve solved global payments at scale,” said Marcus, who now serves as CEO of Lightspark, a payments solution that leverages Bitcoin and the Bitcoin layer 2 Lightning Network.
Source: David Marcus
But two weeks after announcing the project’s launch, Marcus was called to testify in front of the Senate Banking Committee and the House Financial Services Committee, which he says marked the start of “nonstop work and changes to appease lawmakers and regulators.”
After addressing several regulatory concerns ranging from money laundering to consumer protection, Federal Reserve Board of Governors Chair Jerome Powell was supposedly ready to let the project move forward in a “limited way.”
But Powell was then told by Treasury Secretary Janet Yellen that allowing the project to move forward was “political suicide,” Marcus said.
The nail in the coffin occurred when the Federal Reserve supposedly told several banks that they were “not comfortable” with them participating in the project.
Meta abandoned the Diem project in early 2022 after selling its intellectual property and assets to Silvergate Capital, which went into voluntary liquidation in March 2023 and filed for bankruptcy in September.
Marcus said he felt the need to disclose these details after Marc Andreessen, a founder of tech-focused venture capital firm Andreessen Horowitz, discussed political pressures the industry has been faced with on The Joe Rogan Experience podcast.
Related: Tap-to-pay crypto coming to Coinbase Wallet, L2 interoperability in months
Fortunately, Markus left the failed Libra project with one key takeaway.
“If you’re trying to build an open money grid for the world—eventually moving trillions of dollars a day, designed to be here 100 years from now—you have to build it on the most neutral, decentralized, unassailable network and asset.”
And that is, “hands down,” Bitcoin, Markus said.
Big Questions: How can Bitcoin payments stage a comeback?
This article first appeared at Cointelegraph.com News
