Facebook is reportedly planning to test its virtual currency codenamed Libra in India, that will purportedly lend legitimacy to use of digital currency in the country. However, in terms of cryptocurrency, India is under dark clouds, casting doubts on the efficacy of such a plan.
Bloomberg reported last week that Facebook is building Stablecoin, a cryptocurrency pegged to the US dollar or a basket of currencies, so that it is less prone to swings in price. The said product will enable users to transfer money for remittances via WhatsApp through Stablecoin. Given its expanse, India has been chosen as the testing ground for the product.
While the social media giant hasn’t made any comments about the topic, it still has managed to raise curiosities among various circles. Expected to allow peer-to-peer transactions of the token, the proposed currency system might not require banks to transfer money to buy or sell digital currency, a report in ET said quoting leaders in cryptocurrency startups.
Looking at the ambiguous nature of the current regulatory policies in India, thus foray has a dicey future. The Reserve Bank of India has banned bank from providing services to any individual or business in the virtual currencies in April 2018. Individuals and companies involved in the ecosystem have filed a case against the ban in the Supreme Court.
Scheduled for the second week of July, the next hearing will probably decide the future of the cryptocurrency in the country. Meanwhile, the court has directed the government to come out with its own set of policies. While there is no law in the country that stops users from exchanging digital tokens within a platform, it seems Facebook is likely to initially operate within the ambit of this rule.
The founder of Incrypt Blockchain, Nitin Sharma quotes that regulatory approval may be a major impediment when eventually the Facebook project is deployed on a large scale in India. The giant will have to face the challenge of forming a link between the crypto Stablecoin and rupee in order that is real to derive any value for its users.
While not all are rooting for pro-cryptocurrency regulation in the country, they are still enthusiastic about Facebook’s plans. A bitcoin trader notes that deploying a centralized approach by allowing transactions only within its various platforms is beating the purpose altogether.
These are really early days for Facebook and moving beyond traditional payments to add blockchain-based Stablecoin transfers would represent a huge shift for the company. There is still no clarity about the wider rollout of the cryptocurrency by the company and hence it needs to be treated with caution.
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