Indian Regulators Also Echo Same Concerns About Facebook’s Libra Coin Cryptocurrency Project
Facebook will not have an easy time in the third largest economy of Asia. As the company is set on moving its plans surrounding the Libra cryptocurrency forward, the Indian authorities do not seem very happy with the company’s presence.
Subhash Garg, the Economic Affairs Secretary of India, has recently affirmed that Facebook did not explain its new project very well and that the country is not very “comfortable” with cryptos, which can be seen by the fact that companies which deal with cryptocurrencies are currently outlawed in the country and cannot get banking services.
The Reserve Bank of India has places restriction on the market back in 2018 and it is currently drafting a law that may ban cryptos. The position is clear: cryptos are not going to be widely accepted in India, nor will Facebook’s Libra, despite India being one of its largest markets.
Libra, which was unveiled by Facebook last month, will be a stablecoin that will be backed by a basket of assets (mostly government-backed fiat currencies and bonds).
One very specific problem of India is that the local law mandates “money” to “exist in physical form” and “be stamped by the government” in order to actually be considered money. So while countries such as Japan and South Korea are making an effort to integrate cryptos into the economy, India is failing to do it, partly due to outdated legislation.
A very important moment is about to come for Facebook, though. Last year, the Supreme Court of India backed the RBI’s decision to keep the ban. However, a new hearing is coming up on July 23 and it can change the situation for Facebook and the other cryptos.
There is also a law that could make people be arrested for 10 years for holding or selling cryptos being voted right now, but no one is actually sure whether it will pass or not.
So far, the company did not try to get formal permission for a launch in India, but that may still happen soon. However, India is a key market for the token, as Facebook is counting on success on these emergent markets in order to be considered a success. There are over 300 million Facebook users in India and some reports suggest that 2023 will see 440 million users.
Several People Are Criticizing Facebook
Several others are also criticizing Facebook’s Libra. Dovey Wan, from Primitive Ventures, for instance, has affirmed recently that Libra has the risk of becoming a financial monopoly, which would do no one good (except Facebook’s investors).
Others, such as Ran NeuNer from the CNBC, have called Facebook’s CEO Mark Zuckerberg an “unelected dictator” and affirmed that the world would be worse with Libra.