David Marcus, the current CEO and co-founder at Lightspark, which claims to be building the open Money Grid on Bitcoin (and previously who ran Payments/Crypto and Messenger at Meta) recently shared via social media just how the Facebook-led Libra(at one point called Diem) initiative was “killed.”
Marcus led the charge at Meta (Facebook) to create a digital currency that sought to be a global payments platform. The initiative appeared to be doomed from the start but Marcus has now lifted the veil on what was happening in the background that pushed the project to the dustbin of failed digital asset undertakings.
Marcus claims he never shared this publicly before, but following recent discussions on the Joe Rogan podcast, it “feels appropriate to shed more light on this.”
How Libra Was Killed.
I never shared this publicly before, but since @pmarca opened the floodgates on @joerogan’s pod, it feels appropriate to shed more light on this.
As a reminder, Libra (then Diem) was an advanced, high-performance, payments-centric blockchain paired with a…
— David Marcus (@davidmarcus) November 30, 2024
As a reminder, the tech industry professional noted that Libra was considered an “advanced, high-performance,” payments-centric blockchain paired with a stablecoin that they built with Marcus’ team at Meta.
According to Marcus, Libra would’ve solved global payments at scale. He pointed out that before announcing the project, they had spent months “briefing key regulators in DC and abroad.”
After working Congress and other policymakers, they announced the project in June 2019 alongside 28 partner companies. Two weeks later, Marcus was called to testify before both the Senate Banking Committee and the House Financial Services Committee, which was the starting point of “two years of nonstop work and changes to appease lawmakers and regulators.”
Marcus also shared:
“By spring of 2021 (yes they slow played us at every step), we had addressed every last possible regulatory concern across financial crime, money laundering, consumer protection, reserve management, buffers, and so much more, and we were ready to launch. We had worked on a slow rollout of a limited pilot that some members of the Fed’s Board of Governors were supportive of.”
He added that US Federal Reserve Chairman Jay Powell was finally ready to let them “move forward in a limited way.” Marcus noted that as he recollects, the story is that US Treasury Secretary Janet Yellen told Fed Chair Powell at one of their biweekly meetings that “allowing this project to move forward was ‘political suicide,‘ and she would not have his back if he let it happen.”
Marcus said that he wasn’t in the room when this conversation happened, so take these words with “a grain of salt, but effectively, this was the moment Libra was killed.”
He continued:
“Shortly thereafter, the Fed organized calls with all the participating banks, and the Fed’s general counsel read a prepared statement to each of them, saying: ‘We can’t stop you from moving forward and launching, but we are not comfortable with you doing so.’ And just like that, it was over.”
He has further claimed:
“There was no legal or regulatory angle left for the government or regulators to kill the project. It was 100% a political kill—one that was executed through intimidation of captive banking institutions. That was the hardest part of this story for me personally. Not that we had failed, but that America, this country I immigrated to and became a proud citizen of because of its rule of law and value system, behaved in such a way for political reasons. It was a very tough pill to swallow.”
According to Marcus, the bright side of the story is ” the many learnings from this wild ride.”
He also stated that by the end of the project, they had made “so many concessions to get a thumbs-up that the whole design of the network became a Frankenstein of our initial ambitions.”
He concluded:
“We also learned the biggest lesson of all, which is that if you’re trying to build an open money grid for the world—eventually moving trillions of dollars a day, designed to be here 100 years from now—you have to build it on the most neutral, decentralized, unassailable network and asset, which, hands down, is Bitcoin.”
Marcus also shared that this is what many of them who went through this scarring journey are building together at Lightspark. And this time, he claims they “won’t stop until we get it done.”