- David Marcus accused Janet Yellen of pressuring Jerome Powell, leading to Libra’s abandonment despite regulatory compliance.
- Libra faced insurmountable political resistance, stalling its ambitious blockchain-based global payment system.
David Marcus, the former leader of Facebook’s Libra project, has accused US Treasury Secretary Janet Yellen of being a key factor in the initiative’s failure. Marcus claims that Yellen’s pressure on Federal Reserve Chair Jerome Powell produced moves meant to discourage banks from endorsing Libra.
Facebook effectively suppressed the initiative before it could fully develop, despite its significant efforts to resolve regulatory issues and prepare for a small-scale launch in 2021.
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
Libra’s Struggle: A Debate Over Innovation and Government Control
Marcus’s remarks have sparked debates about the events that led Facebook to postpone its stablecoin-based blockchain project. Support for Marcus’s assertions has come from business heavyweights, including Gemini co-founder Cameron Winklevoss and Coinbase CEO Brian Armstrong.
According to Winklevoss, Gemini was about to start Libra in association with Meta when federal authorities intervened, supposedly for political rather than legal or technical grounds. Armstrong also emphasized the importance of making decentralized technologies available as open-source software to mitigate the risks of regulatory excess.
The debate draws attention to a more general issue in the crypto space: the narrow line separating the stifling of innovation from government control.
Critics contend that governments cautious of losing control over monetary systems responded disproportionately negatively to initiatives like Libra, which aimed to transform world payments. The opposition to Libra serves as a cautionary tale for future blockchain initiatives that must navigate the complex legal landscape.
Relatedly, CNF revealed in 2020 that Facebook has published a revised white paper for Libra displaying a quite different vision from its original idea. This revised paper’s smart contract capabilities enable the issuance of stablecoins and digital currencies, such as a digital dollar and a digital euro.
However, despite these changes, the project succumbed to rising governmental pressures, rendering its ambition impossible.
