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Facebook’s Cryptocurrency Libra May Not Be Launched in India

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by Eugenia Kovaliova · 2 min read
Facebook’s Cryptocurrency Libra May Not Be Launched in India
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Facebook’s awaited cryptocurrency Libra may not be launched in India, as the country’s current regulations do not permit cryptocurrency transactions.

Libra, the awaited cryptocurrency by Facebook, may likely be abandoned in India. This can deprive the social media giant of one of its largest markets. The news came out with the recent report by The Economic Times, India’s biggest business daily. The report cites two people aware of the matter:

“The social network’s digital wallet, Calibra, won’t be available in markets where “cryptocurrencies are banned or Facebook is restricted from operating in,” the person said. “Facebook has not filed any application with RBI (Reserve Bank of India) for its cryptocurrency in India,” said a second person aware of the matter. RBI did not respond to queries from ET.”

Indian regulators have always stayed negative to cryptocurrencies and imposed measures to prevent the adoption of Bitcoin and other altcoins, considering them as the means of money laundering, tax evasion, and financing terrorism. In April 2018, RBI had given regulated entities a three-month deadline to stop dealing in virtual currencies due to associated risks.

However, India’s government does not abandon digital assets operating in isolation within a network, as well as digital assets interacting with fiat currency, such as the rupee. It means that if Libra represents itself a closed system, only to be transacted on its network and not beyond, RBI should not be concerned that much.

A few days ago, Facebook has officially published the whitepaper for its Libra project, boldly claiming that it has the power to bank the unbanked and revolutionize the way payments are processed across the globe. The company plans to launch Libra next year and has already collaborated with 28 organizations, including Visa, Mastercard, PayU and Uber.

According to the social network’s analytics, Facebook’s user growth in North America and Europe has slowed down since 2015, while Indian market, on the opposite, has doubled and currently covers more than 10% of Facebook’s user base. That is why, if the awaited cryptocurrency turns out to be abandoned there, the company will suffer a significant loss.

Facebook is currently in the process of obtaining the appropriate licenses in order to operate in as many geographies as possible. According to the news which came earlier today, the U.S. Senate Banking Committee is going to hold a hearing next month to question witnesses over Libra. The hearing is called “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations,” and is set for July 16th.

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