Source: beincrypto
Compiled by: Blockchain Knight
David Marcus, the former head of the Facebook Libra crypto asset project, recently revealed the reasons for the project's failure.
According to Marcus, despite the project's robust design and extensive regulatory consultations, regulatory pressure and the withdrawal of supporting institutions led to the project's halt.
On November 30, Marcus published an article on X detailing the 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 failure of the system was not significantly related to legal or regulatory issues.
On the contrary, regulatory forces played a decisive role.
Marcus stated: "There is a key point worth mentioning: the government or regulatory bodies did not stifle this project from a legal or regulatory perspective at all."
"This is 100% a regulatory conspiracy, primarily aimed at intimidating the banking institutions involved in this project."
Marcus disclosed that Libra faced bottlenecks immediately after its announcement in 2019. Although the team made some adjustments and postponed the project's launch to 2021, regulatory opposition remained.
Marcus emphasized that a shift in stance from Federal Reserve Chairman Jerome Powell after meeting with Treasury Secretary Janet Yellen was a turning point.
Marcus revealed that Yellen referred to supporting Libra as 'regulatory suicide,' prompting the Federal Reserve to issue warnings to banks involved in the project.
It is reported that during these calls, the Federal Reserve's general counsel warned banks not to advance the Libra project due to dissatisfaction with it.
"The Federal Reserve called all participating banks, and the Fed's general counsel read a 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 it. Everything ended."
Since then, industry figures in the crypto asset sector have expressed support for Marcus's statements.
Former Libra board member Kathryn Haun and Gemini co-founder Tyler Winklevoss both emphasized how regulatory motives 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 all on the same side. It was all regulatory factors, with no legal basis whatsoever."
Reflecting on this experience, Marcus emphasized the necessity of decentralization when building future financial systems.
He believes that BTC is an ideal foundation for such networks and cites BTC's neutrality and tamper-proof design.
Marcus summarized: "If you want to establish an open monetary network for the world, with trillions of dollars flowing daily and sustainable for 100 years, it must be built on the most neutral, decentralized, and tamper-proof network and assets, and that undoubtedly is BTC."
Marcus's revelations have intensified scrutiny of 'de-banking' in the crypto asset and technology sectors.
Recent allegations regarding regulatory motives behind financial restrictions have sparked further discussion on the intersection of regulation, oversight, and innovation in the United States.
