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Meta’s ambitious blockchain payment initiative, Diem, ultimately collapsed due to intense political opposition, according to its co-creator David Marcus. In a candid Nov. 30 post on X, Marcus revealed that the project was not shut down due to regulatory violations but as a result of political resistance.
“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,” he stated.
Diem, initially branded as Libra, was introduced in June 2019. Backed by industry heavyweights like Visa and PayPal, the project aimed to establish a decentralized payment system anchored by a US dollar-backed stablecoin.
Marcus recounted how scrutiny intensified just two weeks after Diem’s launch, with Senate and House committee testimonies signaling the start of relentless regulatory pressure. The project addressed concerns related to money laundering and consumer protection, even garnering tentative support from Federal Reserve Chair Jerome Powell.
However, Marcus claimed that Treasury Secretary Janet Yellen opposed the initiative, warning Powell that allowing Diem to proceed would be “political suicide.” Adding to the challenges, the Federal Reserve discouraged participating banks, citing discomfort with the project.
Meta officially abandoned Diem in early 2022, selling its assets to Silvergate Capital, which later faced bankruptcy in September 2023.
Reflecting on the experience, Marcus, now CEO of Lightspark, emphasized the need for resilience when building decentralized financial networks. “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,” he said, adding, “hands down, Bitcoin.”