David Marcus, the former head of Facebook\u2019s blockchain project Libra, recently shared how political opposition led to the ambitious initiative\u2019s downfall.<\/p>\n
In a detailed post on X, Marcus called the project\u2019s failure \u201c100% a political kill,\u201d pointing to actions by government officials that effectively stopped it.<\/p>\n
Libra, later rebranded<\/a> as Diem, was launched by Facebook in 2019. The platform was designed to be a fast, payments-focused blockchain paired with a stablecoin to solve global payment challenges. Before announcing the project, Marcus and his team spent months briefing regulators in the U.S. and abroad.<\/p>\n However, just two weeks later, Marcus was called to testify before the Senate Banking Committee and the House Financial Services Committee. This began two years of efforts to address lawmakers\u2019 concerns.<\/p>\n By spring 2021, Libra\u2019s team had addressed every major regulatory concern, including issues related to financial crime, consumer protection, and reserve management.<\/p>\n A limited pilot rollout was planned, with some members of the Federal Reserve Board of Governors expressing support. However, according to Marcus, the project hit a critical roadblock during a biweekly meeting between Federal Reserve Chair Jay Powell and Treasury Secretary Janet Yellen.<\/p>\n He alleged <\/a>that Yellen advised Powell that supporting Libra would be \u201cpolitical suicide.\u201d Shortly after, the Federal Reserve contacted banks involved in the project, warning them against moving forward. According to the former lead, this indirect pressure effectively ended the initiative.<\/p>\n He explained that the project wasn\u2019t stopped for legal or regulatory reasons but was entirely a political decision enforced by pressuring dependent banking institutions.<\/p>\n For Marcus, the political nature of the project\u2019s demise was the hardest part to accept. \u201cAmerica, this country I immigrated to\u2026 behaved in such a way for political reasons,\u201d he wrote.<\/p>\n Libra faced <\/a>strong opposition globally, with financial leaders calling it a threat to national sovereignty. France\u2019s finance minister, Bruno Le Maire, openly criticized the idea of private companies creating cryptocurrencies, insisting monetary power should stay with governments.<\/p>\n In the U.S., lawmakers were also skeptical, and Mark Zuckerberg was grilled for six hours by Congress over the project at the time.<\/p>\n The broader regulatory environment also worked against the initiative. A November 2021 report <\/a>on stablecoin regulation warned that combining a stablecoin issuer with a major commercial firm could lead to excessive economic power concentration.<\/p>\n Reflecting on the events, Marcus highlighted key lessons from the experience. He concluded that building a truly global financial system requires a neutral, decentralized network like Bitcoin, which he believes is better suited for long-term success.<\/p>\n Following its collapse, many former team members joined other blockchain projects like Aptos and Sui, which use technology developed for Libra. Marcus himself launched <\/a>Lightspark, a startup focused on Bitcoin\u2019s Lightning Network.<\/p>\n The post How US Political Dynamics Led to the Downfall of Facebook\u2019s Crypto Project<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" David Marcus, the former head of Facebook\u2019s blockchain project Libra, recently shared how political opposition led to the ambitious initiative\u2019s downfall. In a detailed post on X, Marcus called the project\u2019s failure \u201c100% a political kill,\u201d pointing to actions by government officials that effectively stopped it. \u2018A Political Kill\u2019 Libra, later rebranded as Diem, was […]<\/p>\n","protected":false},"author":0,"featured_media":25136,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-25135","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/25135"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=25135"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/25135\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/25136"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=25135"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=25135"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=25135"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Lessons and Broader Context<\/h2>\n