David Marcus, the former head of Facebook’s blockchain project Libra, recently shared how political opposition led to the ambitious initiative’s downfall.

In a detailed post on X, Marcus called the project’s failure “100% a political kill,” pointing to actions by government officials that effectively stopped it.

‘A Political Kill’

Libra, later rebranded 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.

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’ concerns.

By spring 2021, Libra’s team had addressed every major regulatory concern, including issues related to financial crime, consumer protection, and reserve management.

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.

He alleged that Yellen advised Powell that supporting Libra would be “political suicide.” 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.

He explained that the project wasn’t stopped for legal or regulatory reasons but was entirely a political decision enforced by pressuring dependent banking institutions.

For Marcus, the political nature of the project’s demise was the hardest part to accept. “America, this country I immigrated to… behaved in such a way for political reasons,” he wrote.

Lessons and Broader Context

Libra