As a seasoned crypto investor and observer of the digital currency landscape, I find the demise of Libra, or Diem as it was later known, to be a fascinating study in politics and technology. Having witnessed the rise and fall of numerous blockchain projects, I can’t help but draw parallels between these events and the political machinations that often play out behind the scenes.
David Marcus, who previously oversaw Facebook’s Libra blockchain project, has revealed that the project’s demise was due to facing strong political opposition.
In a detailed post on X, Marcus called the project’s failure “100% a political kill,” pointing to actions by government officials that effectively stopped it.
‘A Political Kill’
In the year 2019, Facebook introduced Libra, later renamed Diem. This platform was conceived as a swift, payments-oriented blockchain system, accompanied by a stablecoin to tackle global payment difficulties. Prior to making the project public, Marcus and his colleagues engaged in extensive discussions with regulators in both the U.S. and other countries.
Yet, only fortnight had passed when Marcus received a summons to appear before both the Senate Banking Committee and the House Financial Services Committee. This marked the start of a two-year long endeavor aimed at addressing lawmakers’ apprehensions.
By the spring of 2021, Libra’s team successfully tackled all significant regulatory challenges, covering topics like financial misconduct, safeguarding consumers, and managing reserves.
As an analyst, I initially anticipated a phased deployment for this project, garnering approval from certain members of the Federal Reserve Board of Governors. However, during the regular bi-weekly meeting between Federal Reserve Chair Jay Powell and Treasury Secretary Janet Yellen, it became apparent that the project had encountered a significant hurdle.
He alleged that Yellen advised Powell that supporting Libra would be “political suicide.” Shortly after, the Federal Reserve contacted banks involved in the project, warning them against moving forward. According to the former lead, this indirect pressure effectively ended the initiative.
I learned that the halt in this project wasn’t due to any legal or regulatory issues, but rather it was a political move enforced by applying pressure on the banks that were dependent on it.
For Marcus, the political nature of the project’s demise was the hardest part to accept. “America, this country I immigrated to… behaved in such a way for political reasons,” he wrote.
Lessons and Broader Context
As a researcher exploring the realm of digital currencies, I’ve witnessed firsthand the global resistance to Libra, particularly from financial leaders who view it as a potential encroachment on national sovereignty. For instance, France’s finance minister, Bruno Le Maire, has openly voiced his criticism towards private companies launching cryptocurrencies. He firmly believes that monetary power should remain in the hands of governments rather than being distributed among these entities.
During that period in the United States, lawmakers raised questions about the project, subjecting Mark Zuckerberg to a six-hour interrogation by Congress.
In addition, the wider regulatory landscape posed challenges for the initiative. A study published in November 2021 on regulating stablecoins cautioned that merging a stablecoin issuer with a significant commercial entity might result in an unfair accumulation of economic power.
Looking back on recent happenings, I’ve drawn some crucial insights. It seems to me that creating a genuinely global financial system necessitates a neutral, decentralized infrastructure such as Bitcoin. In my opinion, this decentralized network appears more promising for lasting success in the long run.
After its fall, several ex-team members shifted their focus to other blockchain ventures such as Aptos and Sui, both utilizing tech initially designed for Libra. Interestingly, the leader himself started Lightspark, a company dedicated to Bitcoin’s Lightning Network.
Read More
- FARTCOIN PREDICTION. FARTCOIN cryptocurrency
- MORPHO PREDICTION. MORPHO cryptocurrency
- SUI PREDICTION. SUI cryptocurrency
- W PREDICTION. W cryptocurrency
- Destiny 2: Celebrating Epic Moments with a Hilarious Reddit Post
- AAVE PREDICTION. AAVE cryptocurrency
- PENDLE PREDICTION. PENDLE cryptocurrency
- Understanding the Mixed Reactions to Viktor’s Changes in League of Legends
- Understanding the Impact of Honkai: Star Rail’s New Character Reveal PV
- Why Toxicity is Dimming the Fun in Smite: A Deep Dive
2024-12-02 20:03