Interviews with 30 people detail the rise and fall of Meta's Libra project, later renamed Diem, as lofty goals were undermined by Facebook's reputation
On June 24 2021, Jay Powell and Janet Yellen sat down for their weekly breakfast amid the austere surroundings of the US Treasury building on 1,500 Pennsylvania Avenue. Tweets: @mshannahmurphy , @alexeheath , @mshannahmurphy , @mshannahmurphy , @mshannahmurphy , @counternotions , @janchip , @jamespoliti , @davidgerard , @mattvella , @estherbintliff , @davidgerard , @desmondjywee , @smdiehl , @katie_martin_fx , and @muradahmed Tweets: Hannah Murphy / @mshannahmurphy : For this week's FT Magazine cover, @kiranstacey and i spoke with 30+ insiders on the rise and fall of Facebook's cryptocurrency Diem A tale of money and hubris, 3 years in the making & the longest I've ever written by far Here's some of what we learned🧵 https://www.ft.com/... Alex Heath / @alexeheath : Excellent read on one of the biggest blunders in Facebook's history https://twitter.com/... Hannah Murphy / @mshannahmurphy : Throughout, Diem/Facebook put up a fight - attempting to both woo and browbeat regulators. Company insiders (and others) felt that supposedly neutral regulators had strung them along and then been swayed by a combination of politics and the interests of big banks https://twitter.com/... Hannah Murphy / @mshannahmurphy : In June 2021, Diem was ready to launch a pilot, a press release drafted, waiting for a green light from US regulators But Janet Yellen ultimately killed it off, telling Jay Powell she wouldn't protect him from political backlash if he gave it the go ahead (which he wanted to): https://twitter.com/... Hannah Murphy / @mshannahmurphy : But it was not to be. Even after the project distanced itself from Facebook, the link to the company doomed it: “It comes back to Zuckerberg's inability to understand how the world sees Facebook: ‘From the people who ripped your data off, they can now get into your wallet.’” https://twitter.com/... @counternotions : “It had the blue-chip partners, the tech and the right players. None of which could save it” The abortive grift of Facebook's Libra/Diem. https://www.ft.com/... Jan Chipchase / @janchip : “Diem spent years trying to reverse engineer their project to fix all of its faults. But they could never fix being linked to Facebook. It was their original sin.” @ft long read on the failure of Facebook lead Diem https://www.ft.com/... James Politi / @jamespoliti : “Yellen told [Powell] it was his decision to make, but that she would not protect him from the political fallout if he did so. And that was the end of Facebook's digital currency.”- @MsHannahMurphy and @kiranstacey with the inside story on Diem https://www.ft.com/... @davidgerard : it was Yellen who delivered the coup de grace, 2 yrs after the July 2019 hearings struck the mortal blow to Libra the new details on the collapse of Diem are amazing. Did you know Facebook went to the Winklevoss twins to try to save Diem? well done @MsHannahMurphy @kiranstacey Matt Vella / @mattvella : Before the metaverse, Facebook dreamed of building the world's first mainstream digital currency. In this week's @ftmag, @MsHannahMurphy & @kiranstacey report the dramatic, untold story of how it all fell to pieces https://www.ft.com/... https://twitter.com/... Esther Bintliff / @estherbintliff : “It comes back to Zuckerberg's inability to understand how the world sees Facebook: ‘From the people who ripped your data off, they can now get into your wallet.’” Great reporting by @MsHannahMurphy & @kiranstacey for this week's @FTMag cover story: https://www.ft.com/... @davidgerard : this is an amazingly good story from Hannah Murphy on the misbegotten nightmare zombie project that was Facebook's Libra https://www.ft.com/... and yes i get quoted Desmond / @desmondjywee : There are bits in here for both the $FB bulls and bears. I hope for a book to be written about this episode, addressing especially the contrasting regulatory attitudes towards Diem and other stablecoins. https://www.ft.com/... https://twitter.com/... Stephen Diehl / @smdiehl : The fall of Facebook Libra is the classic tale of a collection of unbounded psychopaths trying to enrich themselves on the back of regulatory arbitrage. Zuck surrounds himself with the best people. https://www.ft.com/... Katie Martin / @katie_martin_fx : Powell wanted backing from Yellen, but after weeks of deliberation, she was out. “Yellen told him it was his decision to make, but she would not protect him from the political fallout if he did so. And that was the end of Facebook's digital currency.” https://www.ft.com/... Murad Ahmed / @muradahmed : Such brilliant reporting here. The inside story of the collapse of Facebook's cryptocurrency dreams, featuring guest appearances from Janet Yellen and the Winklevii. A story of money, ego and hubris. By @MsHannahMurphy @kiranstacey in @FTMag https://www.ft.com/...
Context & Ripple Effects
The FT's 30-person oral history closes a loop that opened with David Marcus's 2019 Senate grilling over Libra, when lawmakers' questions about Facebook's fitness to issue money went largely unanswered. The intervening years only hardened the opposition: by late 2021 Meta was still struggling to scale Diem under privacy and regulatory scrutiny, and co-creator David Marcus exited the company entirely.
The new reporting pins the fatal blow on Janet Yellen's refusal to back the launch — a detail that reframes the collapse as a deliberate policy veto rather than market failure, and which Marcus later insisted was '100% a political kill.' The through-line is Facebook's reputation itself: the same trust deficit documented in shelved internal research on the platform's polarizing effects made regulators unwilling to hand it a currency.
First-order effects
- Yellen's refusal effectively kills Diem's US launch path, leaving Meta with a built-but-unusable payments asset and pushing it toward last-ditch options like the reported approach to the Winklevoss twins.
- Marcus's December departure strips the project of its internal champion, leaving Novi under Stephane Kasriel without its founding advocate inside Meta.
Second-order effects
- Facebook's retreat hands the stablecoin field to crypto-native issuers who lack a Big Tech trust penalty but inherit the regulatory scrutiny Libra attracted — the Senate hearing set the template for how Washington now vets dollar-pegged tokens.
- Regulators gain a proven playbook: coordinated Treasury-level opposition can kill a corporate currency before launch, raising the bar every future tech entrant must clear.
Third-order effects
- If the pattern holds, no platform with Facebook-scale reputational baggage can issue money in the US — settlement infrastructure stays with banks and regulated intermediaries, and Big Tech payments ambitions route through partnerships rather than proprietary coins.
- The episode hardens the split between programmable-settlement technology and who is permitted to operate it: the rails proved buildable, but policy control, not engineering, decided the winner.
The trend: Corporate stablecoin projects are being gated less by technical feasibility than by issuer trust — a legitimacy gap that regulators, not markets, are closing.