The co-founders of Meta’s ill-fated cryptocurrency payments project Libra say a political hit job has hindered their efforts.
David Marcus says Libra, later renamed Diem, would have “solved a massive global payments problem.”
The technology executive said his team spent months briefing “key regulators” in the U.S. and abroad before announcing the project along with 28 other companies in June 2019.
“Two weeks later, I was called to testify before the Senate Banking Committee and the House Financial Services Committee, the start of two years of non-stop work and changes to appease lawmakers and regulators.
By spring 2021 (yes, they were slow on us at every step) we had resolved all possible regulatory issues across financial crime, money laundering, consumer protection, reserve management, buffers, etc. and were ready to launch. .
We have committed to a slow rollout of limited pilots, which some members of the Federal Reserve Board support. Finally, Chairman Jay Powell arranged for us to move forward in a limited way. The story I heard was that Jay Powell was told by Treasury Secretary Janet Yellen at one of his bi-weekly meetings that allowing this project to proceed would be ‘political suicide’ and that she would not turn her back if he allowed that to happen. is. . I wasn’t in the room when this conversation happened, so take this with a grain of salt. But in reality, this was the moment Libra died.”
Marcus claims that the U.S. Federal Reserve told banks participating in the Libra project that it was uncomfortable with their participation.
“There remained no legal or regulatory aspects that would have allowed the government or regulators to terminate the project. It was 100% political murder. “It was an act of intimidation and execution of subordinate banking institutions.”
Diem Association closed in early 2022 and sold its intellectual property and other assets to Silvergate Capital Corporation. Silvergate Capital Corporation closed the following year.
Marcus currently serves as CEO of Lightspark, a startup aiming to build Bitcoin (BTC)-based enterprise payment solutions.
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