Political pressure shut down Facebook Libra project

David Marcus, the former leader of Facebook’s Libra project, has revealed that political resistance, not legal or regulatory shortcomings, led to the collapse of the ambitious cryptocurrency initiative.  

In a post on X dated November 30, Marcus outlined how political forces dismantled the Libra project, later renamed Diem, which aimed to revolutionise global payments using a stablecoin and a high-performance blockchain.  

According to Marcus, opposition surfaced immediately after the project's 2019 announcement, despite efforts to address concerns and postpone its launch to 2021.  

He disclosed that Treasury Secretary Janet Yellen labeled support for Libra as “political suicide,” influencing Federal Reserve Chair Jerome Powell to oppose the initiative.  

“The Fed organized calls with all the participating banks, and the Fed’s general counsel read a prepared statement to each of them, saying: ‘We can’t stop you from moving forward and launching, but we are not comfortable with you doing so.’ And just like that, it was over,” Marcus wrote.  

Marcus emphasised that the project's failure stemmed entirely from political maneuvering.  

He described how Federal Reserve officials issued warnings to banks associated with Libra, effectively ending institutional support.  

Prominent industry voices have echoed Marcus’s account.  

Tyler Winklevoss, co-founder of Gemini, stated, “We were on the one-yard line when Federal regulators murdered this project. It was all politics, no basis in law.”  

Reflecting on the experience, Marcus advocated for decentralisation in future financial systems, championing Bitcoin (CRYPTO:BTC) for its neutrality and tamper-proof design.  

“If you’re trying to build an open monetary network for the world...you must build it on the most neutral, decentralized, and tamper-proof network and asset, which is undoubtedly Bitcoin,” he stated.  

The revelations have reignited discussions about the intersection of politics, regulation, and innovation in the cryptocurrency sector, particularly concerning alleged "debanking" practices.