India is the most recent country to air its concerns regarding Facebook’s Libra coin. Forming, the third-largest economy in Asia, India does not intend to let its citizens use Libra. A report unveiled this news earlier today.
Per Subhash Garg, India’s secretary of Economic Affairs took time for an interview where he noted,
Design of the Facebook currency has not been fully explained,
But whatever it is, it would be a private cryptocurrency and that’s not something we have been comfortable with.
Libra’s Regulatory Hurdles
This news comes a month after Facebook unveiled the Libra project officially.
Strategists with Jefferies Financial Group believe that,
Libra will be counting on continued explosive growth from emerging markets and especially India to succeed.
At the moment, there are approximately 313 million Facebook users in India. Statistics show that this number is set to surge by 121 million in the next four years.
While the social firm is targeting India to make Libra mainstream, it has not yet asked for permission to launch the coin in the country.
Also, Libra is poised to face regulatory difficulties as RBI strives to prevent crypto-related crimes. According to the central bank, crypto coins cannot be legal tender as the law needs them to exist in physical form or stamped by the government.
India’s Negative Approach Towards Crypto
Prior to this, the Indian government released a draft bill that proposes banning crypto in the country. The draft is named “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019”. It suggests that any Indian caught trading crypto should face stern penalties.
Reportedly, any offender would face a 10-year jail term. This sentence cuts across crypto holders, miners, and traders. On top of this, the bill states that the state’s courts should not grant the offenders bail.
As previously reported, the Reserve Bank of India also placed restrictions on crypto. RBI cited fraud, volatility and lack of consumer protection as reasons for taking this measure. Also, the central bank denied banking services to firms that deal with crypto.
While India has a negative outlook on Libra, other countries are taking a cautious approach before adopting it. Per a recent publication, the Singapore’s MAS held talks with Facebook regarding Libra. According to the agency’s director Ravi Menon, Libra has potential benefits. However, he said that concerns over how the coin would function are “not trivial”.
The key challenge is to figure out the nature of the beast. What is it more like and which box we can put it into. At this point we are not sure yet.
Do you think Facebook will succeed in convincing India’s government to let its citizens use Libra? Let us know in the comments below.