Regulatory pressure and the withdrawal of supporting institutions led to the project's halt.

‍Source: beincrypto

Translated 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 ultimately led to the project's halt.

On November 30, 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 was not significantly related to legal or regulatory issues.

Instead, regulatory forces played a decisive role.

Marcus noted, "There's a key point worth mentioning: the government or regulatory agencies did not kill this project from a legal or regulatory standpoint."

"This is 100% a regulatory conspiracy, with the main tactic being to intimidate the banks involved in this project."

Marcus revealed that Libra encountered 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 Federal Reserve Chairman Jerome Powell changed his stance after meeting with Treasury Secretary Janet Yellen, marking a turning point.

Marcus disclosed that Yellen described supporting Libra as "regulatory suicide," prompting the Federal Reserve to warn banks involved in the project.

Reportedly, during these calls, the Federal Reserve's general counsel warned banks not to proceed with the Libra project, citing dissatisfaction with the project.

"The Federal Reserve called all participating banks, and the general counsel read a prepared statement to each bank, saying, 'We cannot stop you from proceeding and launching the project, but we are uncomfortable with you doing so.' And that was it; everything ended."

Since then, individuals in the crypto asset industry have supported Marcus's claims.

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 on the same side. It was all regulatory factors, with no legal basis."

Reflecting on this experience, Marcus highlighted the necessity of decentralization in building the future financial system.

He believes BTC is an ideal foundation for such a network, citing BTC's neutrality and tamper-proof design.

Marcus concluded, "If we want to build an open monetary network for the world, capable of facilitating trillions of dollars daily and sustainable for 100 years, it must be built on the most neutral, decentralized, and tamper-proof network and asset, which 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 discussions about the intersection of regulation, oversight, and innovation in the U.S.

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