Facebook's Libra cryptocurrency won't launch in India: Details here
In a matter of months, Facebook plans to launch a cryptocurrency, dubbed Libra, to streamline digital payments between individuals as well as businesses. The digital token will be based on a blockchain network called Calibra, but reports have indicated that neither Libra nor Calibra will be debuting in India - one of Facebook's biggest markets. Here's why.
Cryptocurrency restrictions holding Libra's India's launch
In a conversation with Bloomberg, a spokesperson for the social network confirmed that Libra won't be launching in India owing to the local restrictions against cryptocurrencies. Since April 2018, India's central bank, the Reserve Bank of India, has taken a firm stance against all digital tokens by banning banks from dealing in them. The restriction came as a major blow for India's crypto sector.
Also, government is considering jail term for dealing in cryptocurrency
The government has restricted banks from engaging in crypto transactions, but informal networks still remain active. People are relying on P2P transactions for trading in digital tokens and staying out of the banking system. But, here's the thing, the government is planning to tackle this by imposing monetary penalties and a jail term of up to 10 years on people trading in crypto.
Here's what spokesperson told Bloomberg
"There are no plans to offer Calibra in India," the spokesperson said, adding that "as you may know, there are local restrictions within India that made a launch of Calibra not possible at this time."
This could affect Facebook's footprint in India
Facebook dominates in India through its key products but not launching Libra could affect the company's growth. Essentially, the company would lag behind and fail to match the likes of Google, Amazon, and Paytm in digital payments category. Notably, the company is testing UPI-based payments on WhatsApp, but that's only for a select group of users, not everyone.
Facebook looking to work with regulators, partners
Facebook is now looking to work with partners and governments around the world to bring Libra into as many countries as possible, Facebook spokesperson Alexandru Voica said. She didn't say if the company is in talks with the Indian regulators but claimed, "the blockchain project has multiple uses in smart contracts, supply chain management and so on - it's not just for cryptocurrencies."