Former head of the blockchain division of Meta (formerly Facebook) David Marcus explained why the project to launch the Diem stablecoin, formerly known as Libra, had to be closed.

According to David Marcus, Diem, a stablecoin designed to facilitate international payments, was closed due to strong political pressure from US regulators. Moreover, the government and regulators did not have any legal grounds to curtail the project, but they began to threaten financial institutions. Diem previously secured the support of payment giants Visa and PayPal, where Marcus served as president. However, Visa, along with other companies, left the project due to regulatory difficulties.

Marcus said that two weeks after launching the project, Marcus was called to testify before the US Senate Banking Committee and the House Financial Services Committee. According to Marcus, the development of the project was hampered at every turn. It was not until the spring of 2021 that Diem management discussed with regulators all possible problems related to financial crimes, money laundering, consumer protection and reserve management.

The Chairman of the Board of Governors of the US Federal Reserve System (FRS), Jerome Powell, was already ready to give permission for the project to operate on a “limited scale”. But Treasury Secretary Janet Yellen opposed Diem’s ​​rollout, calling it “political suicide.” This was the nail in the coffin for Diem. The Fed held telephone conversations with all participating banks, warning that it could not prohibit them from participating in the project, but did not approve of their actions.

“This was a 100% political assassination of the project by intimidating banks and payment companies because Diem could improve international payments. It’s a shame that the US, where I immigrated because of its rule of law and value system, behaved this way. It was a very bitter pill to swallow. But we learned the main lesson: if you are trying to build an open money network for the whole world, moving trillions of dollars a day, and which can last 100 years – you must build it on the most neutral and decentralized network, which, without a doubt, is Bitcoin.” — Marcus wrote on social network X.

Meta abandoned the Diem project in early 2022 after selling its intellectual property and assets to Silvergate Capital. In March 2023, Silvergate notified the U.S. Securities and Exchange Commission (SEC) of bankruptcy due to a massive sell-off of assets and an inability to pay debts.