David Marcus Reveals Why Libra Was Shut Down

Marcus had never publicly discussed this until now.

After Marc Andreessen talked about it on Joe Rogan’s podcast, Marcus felt it was the right time to shed some light on what happened. He decided to discuss the story publicly for the first time.

Libra’s Ambition and Political Struggles

Libra, later renamed Diem, was designed to revolutionize global payments. The project aimed to make payments faster, cheaper, and more efficient on a blockchain paired with a stablecoin. Marcus and his team at Meta (formerly Facebook) spent months preparing and briefing regulators before the project was announced in June 2019 with 28 partner companies.

However, just two weeks after the announcement, Marcus found himself testifying before Congress, marking the start of two years of intense scrutiny and changes to satisfy lawmakers.

By spring 2021, after addressing every regulatory concern, Marcus and his team were ready to launch. The Federal Reserve even seemed to support a limited rollout. But then, according to Marcus, a conversation between Treasury Secretary Janet Yellen and Federal Reserve Chair Jay Powell sealed Libra’s fate. Yellen allegedly told Powell that allowing Libra to move forward would be “political suicide” and that she wouldn’t back him. This conversation was the moment that killed the project.

Libra’s Demise and the Political Forces Behind It

Soon after, the Fed made it clear to the participating banks that while they couldn’t stop them from launching Libra, they weren’t comfortable with it. With that, the dream of Libra was over. Also, Tyler Winklevoss, the Co-Founder of Gemini, said something about this topic:

Marcus shared that, despite having addressed every legal and regulatory concern, the project was shut down for political reasons, not legal ones. This was the hardest part for him. It was difficult to accept that America, a country he admired for its rule of law, made a decision based purely on politics.

However, Marcus found a silver lining in the experience. He learned the most important lesson of all: to build a truly open, global payment system, you need to rely on the most decentralized and secure asset available: Bitcoin.

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