Regulatory pressure and the withdrawal of supporting institutions led to the project's halt.
Source: beincrypto
Compiled by: Blockchain Knight
David Marcus, the former head of Facebook Libra Crypto assets project, recently revealed the reasons for the project's failure.
According to Marcus, despite the project being well-designed and having undergone extensive regulatory consultations, regulatory pressure and the withdrawal of supporting institutions still led to the project's halt.
On November 30th, Marcus published an article on X detailing a series of events that led to the termination of Libra.
This blockchain-based payment system was later renamed Diem, aiming to revolutionize global payments by combining high-performance blockchain with stablecoins.
However, Marcus stated that the system's failure had little to do with legal or regulatory issues.
On the contrary, regulatory forces played a decisive role.
Marcus stated: "Here is a key point worth mentioning: the government or regulatory bodies did not suppress the project from a legal or regulatory perspective at all."
"This is 100% a regulatory conspiracy, and the main tactic is to intimidate the banks involved in this project."
Marcus revealed that Libra encountered bottlenecks immediately after its announcement in 2019. Despite the team's adjustments and postponing the project's launch to 2021, regulatory opposition persisted.
Marcus emphasized that Federal Reserve Chairman Jerome Powell changed his stance after meeting with Treasury Secretary Janet Yellen, marking a turning point.
Marcus revealed that Yellen referred to supporting Libra as "regulatory suicide," which prompted the Federal Reserve to warn the banks involved in the project.
Reportedly, during these calls, the Fed's general counsel warned banks not to proceed with the Libra project on the grounds of dissatisfaction with the project.
"The Federal Reserve had calls with all participating banks, and the Fed's general counsel read a pre-prepared statement to each bank, saying 'We cannot stop you from moving forward and launching the project, but we are uncomfortable with you doing so.' And that was that; everything ended."
Since then, professionals in the crypto asset industry have supported Marcus's claims.
Former Libra board member Kathryn Haun and Gemini co-founder Tyler Winklevoss both highlighted how regulatory motivations derailed Libra.
Winklevoss stated: "Gemini worked closely with David and his Meta team to help launch Libra (also known as Diem)."
"When federal regulators vetoed this project, we were on the same front. It was all regulatory factors, with no legal basis whatsoever."
Reflecting on this experience, Marcus emphasized the necessity of decentralization when building the financial system of the future.
He believes that BTC is the ideal foundation for such a network and cites BTC's neutrality and tamper-proof design.
Marcus summarized: "If we want to establish an open monetary network for the world, where tens of trillions can flow daily and be sustainable for 100 years, it must be built on the most neutral, decentralized, and tamper-proof network and asset, and that is undoubtedly BTC."
Marcus's revelations intensified scrutiny of 'de-banking' in the crypto asset and technology space.
Recent allegations regarding financial restrictions due to regulatory motivations have sparked further discussions on the intersections of regulation, oversight, and innovation in the U.S.
