“Facebook has not filed any application with RBI (Reserve Bank of India) for its cryptocurrency in India.”
Facebook’s new cryptocurrency project may not have access to users in India, one of its largest potential markets, due to regulatory constraints, according to a new report by Indian news source The Economic Times.
The publication declared that “a person directly in the know”, “the cryptocurrency to be unveiled by Facebook next year, will not be available in India.”
If this is true, Facebook could be missing out on a serious chunk of revenue–when Libra was first announced at the end of last year, India’s sizeable remittance market was speculated to be the project’s primary aim.
Indeed, in a second report from the Economic Times, strategists with Jefferies Financial Group Inc. explained that “Libra will be counting on continued explosive growth from emerging markets and especially India to succeed.”
Calibra will be unavailable in jurisdictions where “cryptocurrencies are banned or Facebook is restricted from operating in.”
In any case, the “in-the-know” individual explained that the project’s digital wallet, Calibra, will be unavailable in jurisdictions where “cryptocurrencies are banned or Facebook is restricted from operating in.” If this is true, this could mean that users in China will also be unable to access the new cryptocurrency network.
This may change if Facebook enters into talks with Indian regulators–but according to a second person familiar with the matter, “Facebook has not filed any application with RBI (Reserve Bank of India) for its cryptocurrency in India.”
While RBI has not publicly commented on the matter, a representative from Facebook told the Economic Times that “we expect Calibra to work on WhatsApp and be available globally.”
“If Facebook were to design the Libra to be a closed system…”
And indeed, Facebook may run into fewer problems if the currency stays within its various platforms.
“If Facebook were to design the Libra to be a closed system, only to be transacted on its network and not beyond, RBI should ideally be less concerned, since the coin does not engage with the external economy,” explained Anirudh Rastogi, founder of Ikigai Law, a technology-focused law firm. “If it is not meant to operate in a closed system, then it is exactly the kind of digital asset that concerns RBI.”
However, Rastogi also conceded that “regulations as currently drafted seem to indiscriminately apply to both the above examples.” In April of last year, RBI said that regulated entities must stop their cryptocurrency dealings within three months. However, the ban is currently contested in the Supreme Court–the next scheduled hearing is on July 23.
But things don’t seem to be headed in a positive direction. Another, even harsher ban–one that would punish the use of cryptocurrencies with a ten-year prison sentence–is currently making its rounds through the Indian legislature.
And Tanvi Ratna, a policy analyst and fellow at New America, explained that at the end of they day, “if the government brands it criminal activity then obviously Facebook is knowingly committing an offence” no matter how Libra is used.