Indian Government Potentially Banning Facebook’s Project Libra
It’s been revealed through the Indian Economic Times that Project Libra, the cryptocurrency initiative being developed by Facebook, might not be available to traders and investors in India. This could come as a significant blow to Libra, as India is one of the most substantial growing Forex & FX Markets worldwide. The Publication has officially declared that the cryptocurrency won’t be available in the country. However, nobody in the Indian Government or Calibra have confirmed this statement to be true.
Facebook will lose a significant portion of its revenue by losing the Indian market, which is speculated to be one of the primarily aimed markets for Libra. Strategist Firms, like the Jeffries Financial Group, have explained that unless Libra can grow dramatically in emerging markets like India, then the goal to become the new worldwide currency won’t be plausible.
Calibra, the Facebook subsidiary that is developing and maintaining Project Libra won’t be available to provide the coins services in jurisdictions where cryptocurrencies are illegal or where Facebook is banned. Crypto is unlawful in India, but Facebook has been speaking with the Reserve Bank of India and Government Officials to create a licensing agreement that would allow for them to provide Libra in the country. Considering that nearly everyone in India uses Facebook, it’s somewhat hopeful that the coin will receive approval from RBI.
The Reserve Bank of India hasn’t publically stated that they’ve banned Libra either, which indicates that The Economist is creating “Fake News” for their benefit. The company has spoken with reporters in India, stating that Calibra will work on WhatsApp and Messenger worldwide, even if it has to be a closed system.
The Push Back
At the moment, Facebook and Calibra aren’t maintaining a closed system with Project Libra. This brings concerns to the Reserve Bank of India & certain government officials who aren’t in favour of cryptocurrency development. Those officials have presented new legislation that would immediately have anybody operating a cryptocurrency exchange in India, fined with a ten-year prison sentence.
Those same officials also implemented the legislation that caused for all cryptocurrency firms and exchanges currently operating in India to stop their financial trading as of June 2019. However, that legislation is being fought back by government officials on July 23rd, 2019. This makes it hard to determine if the situation for Facebook is positive or negative; their talks with the government and bank will only go so far.
The Founder of Ikigai Law, AnirudhRastogi commented on the potential ban of Libra by stating: “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. If it is not meant to operate in a closed system, then it is exactly the kind of digital asset that concerns RBI.”
TanviRatna, a Policy Analyst with New America, also commented stating: “If the government brands it criminal activity then obviously Facebook is knowingly committing an offence.”