Industry News
Jan 28, 2025
Industry News
Industry News
Meta’s Stablecoin Project Suffered “100% Political Kill”: Lightspark CEO David Marcus
Photo by: CoinWire Japan on Unsplash
Tech entrepreneur David Marcus accused U.S. politicians of killing Meta’s stablecoin project, Diem.
The project in question was founded in 2019 before shutting down unceremoniously almost three years later.
Marcus has since launched another company that seeks to fulfill Diem’s vision.
Facebook’s former crypto head and Lightspark CEO David Marcus recently revealed how U.S. government officials allegedly “killed” Meta’s stablecoin project, Diem, due to insuperable political pressure.
First proposed in June 2019 with the name Libra, Diem aimed to create a decentralized global payment system powered by a U.S. dollar-pegged token. Marcus was Diem’s co-creator and served as a board member when the project sold its intellectual property and other assets to Silvergate Capital Corporation for $182 million in January 2022.
Global policymakers and central bankers feared Diem’s decentralized digital currency could threaten monetary stability, facilitate money laundering, and compromise Facebook users’ privacy. During that time, Facebook had over 2.8 billion monthly active users.
While Diem battled stiff regulatory headwinds from abroad and overseas since its launch, with the Financial Times arguing in an exclusive report that the project was a “challenge to the status quo,” Marcus believes top government officials intentionally thwarted it for political reasons.
How Diem Was “Killed” by Treasury Secretary Janet Yellen
In a recent X post, Marcus said he felt the need to set the record straight regarding Diem’s demise after Andreessen Horowitz founder Marc Andreessen discussed on The Joe Rogan Experience podcast the political challenges plaguing the nascent digital asset industry.
According to Marcus, Diem’s regulatory woes got out of hand in the spring of 2021 when the project planned a slow rollout of a limited pilot with the backing of some members of the Fed’s Board of Governors, including Chair Jay Powell.
“The story, as I heard it, is that Jay Powell was told by Treasury Secretary Janet Yellen at one of their biweekly meetings that allowing this project to move forward was “political suicide,” and she would not have his back if he let it happen,” Marcus wrote.
The CEO explained that the development came after his testimony in front of the Senate Banking Committee and the House Financial Services Committee in an effort to “appease” lawmakers and regulators. He claimed that Diem had addressed nearly all regulatory concerns across financial crime, money laundering, consumer protection, and reserve management before its unceremonious shutdown.
“Prior to announcing the project, we spent months briefing key regulators in DC and abroad. We then announced the project in June 2019 alongside 28 companies.” Marcus said. “There was no legal or regulatory angle left for the government or regulators to kill the project. It was 100% a political kill.”
The 28 companies Marcus was referring to included payment giants Visa and Mastercard, which chickened out of the project due to its intense regulatory scrutiny. The exodus from Diem gathered steam even before its shutdown, with other notable departures from PayPal, Vodafone, eBay, and Kevin Weil, the project’s co-creator and currently OpenAI’s Chief Product Officer.
Marcus said the last nail in Diem’s coffin came when the Fed “organized calls” with participating banks and issued a statement through a general counsel warning them against proceeding with the project.
Per the CEO, politicians ended a project intended to solve global payments at scale. However, Diem’s shutdown and the sale of its assets to Silvergate didn’t stop Marcus’ dream of building an “open money grid” for the world.
Transferring Diem’s Potential to Lightspark
Describing his experience with Diem as a “scaring journey,” Marcus said he learned several lessons from the “wild” ride and noted that building a scalable solution that can move trillions of dollars a day would mean developing it on a neutral, decentralized, and unassailable network and asset like Bitcoin.
“By the end of the project, we had made so many concessions to get a thumbs-up that the whole design of the network became a Frankenstein of our initial ambitions,” Marcus asserted. “And now this is what many of us who went through this scarring journey are building together at Lightspark.”
Marcus founded Lightspark in 2022 as a tech startup that leverages the Bitcoin Lightning Network to build low-cost, interoperable, and enterprise-grade payment solutions for the global masses. The company raised $173 million in Series A funding at a valuation of almost $1 billion. The round attracted participation from notable industry names, including a16z Crypto, Paradigm, Coatue, and Matrix Partners.
Tech entrepreneur David Marcus accused U.S. politicians of killing Meta’s stablecoin project, Diem.
The project in question was founded in 2019 before shutting down unceremoniously almost three years later.
Marcus has since launched another company that seeks to fulfill Diem’s vision.
Facebook’s former crypto head and Lightspark CEO David Marcus recently revealed how U.S. government officials allegedly “killed” Meta’s stablecoin project, Diem, due to insuperable political pressure.
First proposed in June 2019 with the name Libra, Diem aimed to create a decentralized global payment system powered by a U.S. dollar-pegged token. Marcus was Diem’s co-creator and served as a board member when the project sold its intellectual property and other assets to Silvergate Capital Corporation for $182 million in January 2022.
Global policymakers and central bankers feared Diem’s decentralized digital currency could threaten monetary stability, facilitate money laundering, and compromise Facebook users’ privacy. During that time, Facebook had over 2.8 billion monthly active users.
While Diem battled stiff regulatory headwinds from abroad and overseas since its launch, with the Financial Times arguing in an exclusive report that the project was a “challenge to the status quo,” Marcus believes top government officials intentionally thwarted it for political reasons.
How Diem Was “Killed” by Treasury Secretary Janet Yellen
In a recent X post, Marcus said he felt the need to set the record straight regarding Diem’s demise after Andreessen Horowitz founder Marc Andreessen discussed on The Joe Rogan Experience podcast the political challenges plaguing the nascent digital asset industry.
According to Marcus, Diem’s regulatory woes got out of hand in the spring of 2021 when the project planned a slow rollout of a limited pilot with the backing of some members of the Fed’s Board of Governors, including Chair Jay Powell.
“The story, as I heard it, is that Jay Powell was told by Treasury Secretary Janet Yellen at one of their biweekly meetings that allowing this project to move forward was “political suicide,” and she would not have his back if he let it happen,” Marcus wrote.
The CEO explained that the development came after his testimony in front of the Senate Banking Committee and the House Financial Services Committee in an effort to “appease” lawmakers and regulators. He claimed that Diem had addressed nearly all regulatory concerns across financial crime, money laundering, consumer protection, and reserve management before its unceremonious shutdown.
“Prior to announcing the project, we spent months briefing key regulators in DC and abroad. We then announced the project in June 2019 alongside 28 companies.” Marcus said. “There was no legal or regulatory angle left for the government or regulators to kill the project. It was 100% a political kill.”
The 28 companies Marcus was referring to included payment giants Visa and Mastercard, which chickened out of the project due to its intense regulatory scrutiny. The exodus from Diem gathered steam even before its shutdown, with other notable departures from PayPal, Vodafone, eBay, and Kevin Weil, the project’s co-creator and currently OpenAI’s Chief Product Officer.
Marcus said the last nail in Diem’s coffin came when the Fed “organized calls” with participating banks and issued a statement through a general counsel warning them against proceeding with the project.
Per the CEO, politicians ended a project intended to solve global payments at scale. However, Diem’s shutdown and the sale of its assets to Silvergate didn’t stop Marcus’ dream of building an “open money grid” for the world.
Transferring Diem’s Potential to Lightspark
Describing his experience with Diem as a “scaring journey,” Marcus said he learned several lessons from the “wild” ride and noted that building a scalable solution that can move trillions of dollars a day would mean developing it on a neutral, decentralized, and unassailable network and asset like Bitcoin.
“By the end of the project, we had made so many concessions to get a thumbs-up that the whole design of the network became a Frankenstein of our initial ambitions,” Marcus asserted. “And now this is what many of us who went through this scarring journey are building together at Lightspark.”
Marcus founded Lightspark in 2022 as a tech startup that leverages the Bitcoin Lightning Network to build low-cost, interoperable, and enterprise-grade payment solutions for the global masses. The company raised $173 million in Series A funding at a valuation of almost $1 billion. The round attracted participation from notable industry names, including a16z Crypto, Paradigm, Coatue, and Matrix Partners.
Tech entrepreneur David Marcus accused U.S. politicians of killing Meta’s stablecoin project, Diem.
The project in question was founded in 2019 before shutting down unceremoniously almost three years later.
Marcus has since launched another company that seeks to fulfill Diem’s vision.
Facebook’s former crypto head and Lightspark CEO David Marcus recently revealed how U.S. government officials allegedly “killed” Meta’s stablecoin project, Diem, due to insuperable political pressure.
First proposed in June 2019 with the name Libra, Diem aimed to create a decentralized global payment system powered by a U.S. dollar-pegged token. Marcus was Diem’s co-creator and served as a board member when the project sold its intellectual property and other assets to Silvergate Capital Corporation for $182 million in January 2022.
Global policymakers and central bankers feared Diem’s decentralized digital currency could threaten monetary stability, facilitate money laundering, and compromise Facebook users’ privacy. During that time, Facebook had over 2.8 billion monthly active users.
While Diem battled stiff regulatory headwinds from abroad and overseas since its launch, with the Financial Times arguing in an exclusive report that the project was a “challenge to the status quo,” Marcus believes top government officials intentionally thwarted it for political reasons.
How Diem Was “Killed” by Treasury Secretary Janet Yellen
In a recent X post, Marcus said he felt the need to set the record straight regarding Diem’s demise after Andreessen Horowitz founder Marc Andreessen discussed on The Joe Rogan Experience podcast the political challenges plaguing the nascent digital asset industry.
According to Marcus, Diem’s regulatory woes got out of hand in the spring of 2021 when the project planned a slow rollout of a limited pilot with the backing of some members of the Fed’s Board of Governors, including Chair Jay Powell.
“The story, as I heard it, is that Jay Powell was told by Treasury Secretary Janet Yellen at one of their biweekly meetings that allowing this project to move forward was “political suicide,” and she would not have his back if he let it happen,” Marcus wrote.
The CEO explained that the development came after his testimony in front of the Senate Banking Committee and the House Financial Services Committee in an effort to “appease” lawmakers and regulators. He claimed that Diem had addressed nearly all regulatory concerns across financial crime, money laundering, consumer protection, and reserve management before its unceremonious shutdown.
“Prior to announcing the project, we spent months briefing key regulators in DC and abroad. We then announced the project in June 2019 alongside 28 companies.” Marcus said. “There was no legal or regulatory angle left for the government or regulators to kill the project. It was 100% a political kill.”
The 28 companies Marcus was referring to included payment giants Visa and Mastercard, which chickened out of the project due to its intense regulatory scrutiny. The exodus from Diem gathered steam even before its shutdown, with other notable departures from PayPal, Vodafone, eBay, and Kevin Weil, the project’s co-creator and currently OpenAI’s Chief Product Officer.
Marcus said the last nail in Diem’s coffin came when the Fed “organized calls” with participating banks and issued a statement through a general counsel warning them against proceeding with the project.
Per the CEO, politicians ended a project intended to solve global payments at scale. However, Diem’s shutdown and the sale of its assets to Silvergate didn’t stop Marcus’ dream of building an “open money grid” for the world.
Transferring Diem’s Potential to Lightspark
Describing his experience with Diem as a “scaring journey,” Marcus said he learned several lessons from the “wild” ride and noted that building a scalable solution that can move trillions of dollars a day would mean developing it on a neutral, decentralized, and unassailable network and asset like Bitcoin.
“By the end of the project, we had made so many concessions to get a thumbs-up that the whole design of the network became a Frankenstein of our initial ambitions,” Marcus asserted. “And now this is what many of us who went through this scarring journey are building together at Lightspark.”
Marcus founded Lightspark in 2022 as a tech startup that leverages the Bitcoin Lightning Network to build low-cost, interoperable, and enterprise-grade payment solutions for the global masses. The company raised $173 million in Series A funding at a valuation of almost $1 billion. The round attracted participation from notable industry names, including a16z Crypto, Paradigm, Coatue, and Matrix Partners.
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