The much-awaited cryptocurrency of Facebook , Libra, also touted as Bitcoin rival, will not launch in India due to the RBI ban on banks to carry out transactions related to digital currencies. While Libra will be officially unveiled next year, the social media giant has not submitted any formal application related to the cryptocurrency with the Reserve Bank of India, claims The Economic Times. Facebook has reportedly said that its digital wallet, Calibra, will not be available in countries where cryptocurrencies are banned. In other countries, Calibra will be made available via Facebook's Messenger, WhatsApp and also as a standalone app.
Social media giant has signed up over a dozen companies, including some of the world's largest corporations like Visa Inc, Mastercard Inc, PayPal Holdings Inc. and Uber Technologies Inc, to back the cryptocurrency project.
However, the RBI ban could be a hurdle in Facebook's dream to enter India. The apex bank, in its April 6 circular, had said that "entities regulated by the Reserve Bank shall not deal in VCs (virtual currencies) or provide services for facilitating any person or entity in dealing with or settling VCs." However, the RBI had not imposed any restrictions on the peer-to-peer transactions. Many digital exchanges approached the Supreme Court, and the next hearing in the case will be held on July 23.
Experts believe the RBI regulations may not be a problem for Facebook if it is designed to be a "closed system", which will only carry out transactions through its network. Some also argue that Libra, being a stablecoin may not operate in India due to the RBI's concerns around tax evasion and money laundering. Stablecoins are cryptocurrencies pegged to the US Dollar and is designed to minimise the effects of price volatility. Others believe Facebook may also not meet various provisions of the Income Tax Act, including sections 79 and 75, which say a company is fully responsible if its platform is used to carry out any illegal activity like dealing in cryptocurrencies in India.
Facebook's idea behind Libra was to create a digital coin that would be far easier to use for daily purchases because it would be more stable than currencies like Bitcoin. It is eying around $1 billion worth of funding by taking several investors on board. Back in 2014, Facebook had hired former PayPal president David Marcus to run its Messaging Products. Marcus is also part of the Coinbase, digital currency exchange, and is heading Facebook's blockchain initiatives.
Edited by Manoj Sharma