Social media giant Facebook recently announced its Libra cryptocurrency and Calibra digital wallet. The digital coin will launch sometime in 2020. However, it seems unlikely that Facebook would launch its Libra cryptocurrency and Calibra digital wallet in India anytime soon.
The heart of the matter
People familiar with the matter told ET that “current regulations do not permit use of the banking network for blockchain currency transactions.” The Calibra digital wallet will be globally available on WhatsApp. However, it will not launch in countries where cryptocurrencies are banned. “Facebook has not filed any application with RBI (Reserve Bank of India) for its cryptocurrency in India,” a person aware of the matter told ET.
Partnerships for Libra launch
Facebook has already partnered 28 organizations for its new cryptocurrency and digital wallet. These include PayU, Uber, Mastercard and Visa. They will accept the virtual currency on both WhatsApp and Facebook Messenger. At launch, Facebook expects to have at least 100 members.
“Calibra can be expected to work on WhatsApp globally,” a Facebook representative told ET. The representative, however, did not shed any light on India launch.
Due to the risks associated with virtual currencies, RBI had given a 3-month deadline to regulated entities in April 2018. The RBI also asked them to stop dealing in virtual currencies. RBI regulations do not discriminate between digital assets that operate in isolation within a network, India’s legal expert said.
“If Facebook were to design the Libra to be a closed system, only to be transacted on its network and not beyond, RBI should ideally be less concerned, since the coin does not engage with the external economy,” Anirudh Rastogi, founder, Ikigai Law, a technology-focused law firm told ET.
“If it is not meant to operate in a closed system, then it is exactly the kind of digital asset that concerns RBI. Regulations as currently drafted seem to indiscriminately apply to both the above examples,” he added.