Political Interference Allegedly Ended Facebook’s Diem Stablecoin Initiative

• David Marcus claims political intervention, not regulatory issues, killed Facebook’s Diem project.  
• Federal Reserve allegedly pressured banks to withdraw support for Diem, says Marcus.  
• Industry leaders highlight growing debanking targeting crypto firms in the U.S.  

David Marcus, the former head of Facebook’s cryptocurrency project, Diem, has accused political interference of derailing the initiative. He disclosed that the stablecoin was prepared for a limited rollout in 2021 after addressing all regulatory concerns. However, political pressure from the U.S. Treasury and Federal Reserve ultimately shut it down.  

Marcus revealed these details in a recent post on X, claiming the project’s collapse was not due to regulatory noncompliance. Instead, he alleges that then-Treasury Secretary Janet Yellen advised Federal Reserve Chair Jay Powell that approving Diem’s rollout would be “political suicide.” This prompted the Federal Reserve to pressure banks supporting the initiative to sever ties.  

The Diem stablecoin, initially branded as Libra, was envisioned as a global digital currency for payments. Despite significant adjustments to meet regulatory demands, including scaling back its ambitions, the project could not overcome resistance from U.S. authorities.  

These revelations add weight to broader concerns in the cryptocurrency sector about what many describe as “Operation Chokepoint 2.0.” This alleged initiative involves federal agencies pressuring banks to distance themselves from crypto-related businesses. Several industry leaders have voiced similar experiences of being debanked.  

Custodia Bank‘s CEO, Caitlin Long, responded to Marcus’s statements, claiming that her institution faced similar targeting. Long suggested that the Federal Reserve played a direct role in Custodia Bank’s challenges while engaging with cryptocurrency.  

Tech investor Marc Andreessen also highlighted this issue, stating during a podcast that more than 30 tech founders had been debanked over the last four years. In another example, crypto founder Sam Kazemian alleged that JPMorgan Chase was directed to close accounts tied to cryptocurrency wealth.  

The concerns extend to larger players, such as Coinbase, which recently accused the Federal Deposit Insurance Corporation (FDIC) of discouraging banks from supporting cryptocurrency firms under the guise of safety protocols.  

These accounts reflect a growing unease in the cryptocurrency industry about the relationship between federal agencies, banks, and digital asset ventures, casting doubt on the future of such projects within the United States.