Facebook’s plan to roll out Project Libra worldwide may have some serious laynching in India . The social media giant stated that the country’s regulatory framework won’t be allowing the digital wallet service to deliver its functions properly.
This week, a Facebook official representative stated:
“The representative is likely referring to an order by the central bank, the Reserve Bank of India (RBI), which last April effectively banned banks from providing services to cryptocurrency-related firms such as exchanges. Several of India’s top exchanges have since closed, citing the RBI restriction as to the reason for failing business”
Until this moment, FB has not filed an application for the acceptance of the project by the RBI (Reserve Bank of India). This decision contrasts with the current Facebook strategy as India is currently the largest market of the tech giant. In fact, a pilot of a Whatsapp payment service is taking place right now with the participation of over 1million civilians. According to Statista, India has 400 million WhatsApp users.
Although the news is sad for many, the hopes are not completely lost as the current topic is being debated in the Supreme Court and some high-level government officials are pushing for new cryptocurrency legislation. Some experts say that the first cryptocurrency-allowance laws could come between 2020 and 2021, but they will still be very restrictive.
Alexandru Voica, from Facebook PR team in London, affirmed that:
“Calibra will respect the legislation, but we are looking to work with regulators to see if the legislation can be updated.”
Also, economists are optimistic about the idea of India opening its banking system further in the future, as the country aims to become an economic superpower. Thus, if India wishes to attract new investors, the current institutional system must be changed. For an economy to grow, the government will need to strengthen the confidence of foreign investors as well as build credit facilities and settle the ground for new business opportunities, regardless of them being disruptive or not.
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