Facebook Libra Was Killed Politically By Pressure from US Secretary Janet Yellen

As a seasoned investor who has witnessed the rise and fall of numerous cryptocurrencies, I can attest to the intrigue surrounding the Facebook Libra project and its unfortunate demise. David Marcus’s account of the political machinations that led to Libra’s downfall is both enlightening and disheartening.


David Marcus, who previously led the now-dissolved Facebook Libra stablecoin initiative, has publicly disclosed that the Biden administration effectively halted the project despite clearing all regulatory hurdles. In his extensive article titled “The Demise of Libra: An Inside Look“, Marcus offers a comprehensive account of the intense political battle. He additionally explains how US Treasury Secretary Janet Yellen influenced Federal Reserve Chair Jerome Powell to veto its approval.

Facebook Libra Was Killed Politically, Says David Marcus

David Marcus, in charge of Facebook’s Libra initiative (later renamed Diem), discussed how political pressures effectively halted the project, despite setting up regulatory challenges. The vision behind Libra was to transform global payment systems by combining a robust blockchain with a stablecoin.

Marcus explained that him and his colleagues at Meta have designed a multifaceted system aimed at tackling financial crimes such as money laundering, safeguarding consumers, managing reserves, and more. This initiative, launched in June 2019 with 28 collaborators, has been under close examination by regulators since its inception.

After the unveiling of Libra, both the Senate Banking Committee and the House Financial Services Committee summoned Marcus to provide testimony. As a result, his team undertook extensive revisions over almost two months in an attempt to alleviate the concerns of lawmakers, but ultimately decided to abandon the project.

Marcus stated that by 2021, the Facebook Libra project fulfilled each essential regulatory prerequisite for a preliminary launch and even earned endorsement from certain Federal Reserve governors. Yet, he notes that US Treasury Secretary Janet Yellen advised the Fed Chair that endorsing Libra would be equivalent to a “political self-destruction.” Shortly after this guidance, Powell directed all regulated banks to cease their support for the project, eventually causing its downfall. David Marcus penned:

In simpler terms, the project couldn’t be stopped through legal or regulatory means; it was politically terminated using intimidation tactics on banks under control. This aspect of the story was particularly challenging for me because I had high expectations for America, a nation I chose and was accepted as a citizen due to its commitment to rule of law and values. It was disheartening to see such political manipulation in a country I respected so much. It was a bitter pill to accept this behavior from America.

Crypto Industry Leaders Back David Marcus’s Claims

Key figures in the cryptocurrency sector, such as Brian Armstrong (CEO of Coinbase), Cameron Winklevoss (co-founder of Gemini exchange), and Caitlin Long (CEO of Custodia Bank), have voiced their agreement with David Marcus. They argue that the Federal Reserve’s actions are akin to Operation Choke Point 2.0, where regulated banks were pressured to sever relationships with crypto companies. In response to Marcus’s post on the X platform, Cameron Winklevoss made this statement:

I can verify that Gemini collaborated extensively with David and his Meta team on the development of Libra, which was originally known as Diem. We were just about to launch it when federal authorities effectively halted the project. The termination seemed more political than legally justified.

As an analyst, I find myself echoing the sentiments of Caitlin Long, CEO of Custodia Bank, when she said, “David Marcus, that sounds reminiscent! One day, much like you’ve done, I’ll have the opportunity to share the true account of what the Federal Reserve did to Custodia Bank and how they manipulated the truth to serve the political agendas of Biden/Warren. The level of corruption is astounding, and it’s encouraging to see it being exposed in the public sphere now.

XRP Lawyer John Deaton recently demanded a detailed investigation into Operation Choke Point 2.0. He proposed that the incoming administration appoint an independent counsel to lead the investigation, recommending Nic Carter as a strong candidate for the investigative team

Coinbase CEO Brian Armstrong Shares A Tip

Brian Armstrong, Coinbase’s CEO, stated that government officials, such as Secretary Janet Yellen, have put pressure on banks to avoid working with crypto companies and even the Facebook Libra project. Armstrong referred to previous instances like Meta’s Llama project launch to highlight the necessity of developing new technologies without first obtaining regulatory approval.

In a similar vein as Bitcoin‘s evolution, Armstrong emphasizes that it’s crucial for decentralized technologies to be accessible as free, public software. This way, he suggests, they will face less resistance from regulatory bodies. “When these tools are unleashed and in widespread use,” he said, “they cannot be retracted.

According to the head of Coinbase, this method is essential for nurturing creativity, and the Bitcoin network stands out as a thriving, unauthorized model. Furthermore, Armstrong emphasized his conviction that “software creation is equivalent to free speech,” advocating for the defense of coding under the First Amendment rights.

Makes sense – the government pressured the banks (again).

I think the lesson from Libra is that these tools should be released as open source software, and to not ask for permission. Once they are out in the wild they can’t be rolled back. This is why Bitcoin worked, and it’s…

— Brian Armstrong (@brian_armstrong) November 30, 2024

The prospect of Facebook’s Libra project may encourage other cryptocurrency companies that were impacted by Operation Choke Point 2.0 to come forward and share their experiences. With Donald Trump‘s proposed appointment of a ‘crypto leader’ at the White House, there could be significant improvements for the crypto industry overall. It will certainly be intriguing to observe if Facebook’s Diem stablecoin project makes a comeback.

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2024-11-30 07:52