How Political Pushback Killed Facebook’s Diem Project, According to David Marcus

David Marcus, former head of Facebook’s Diem project, revealed that the initiative’s failure was largely due to political pressure, not regulatory issues.

In a post, Marcus explained that despite years of adjustments to appease lawmakers, the project’s downfall came when U.S. Treasury Secretary Janet Yellen actively lobbied against it, fearing political backlash.

With some support from the Federal Reserve’s leadership, the project ultimately faced resistance from powerful figures like Yellen, leading to its demise.

The final blow came when the Federal Reserve pressured participating banks, signaling discomfort with the project’s continuation. Additionally, regulators raised concerns over Facebook’s potential control over the financial system, contributing to the project’s end.

Marcus pointed out that, despite significant work to gain approval, the project was doomed by political infighting and resistance from key government figures.

After Diem’s collapse, many former team members moved to Aptos and Sui, blockchain projects built on Move, the programming language originally developed for Diem.

Marcus, now focused on his new venture, Lightspark, aims to enhance the Bitcoin Lightning Network, signaling his continued commitment to the cryptocurrency space.