The Reserve Bank of India released a circular in 2018 stating a complete banking ban on crypto. Since Facebook’s project might not need the usually required banking services, the test run might continue without the government’s interference. Facebook’s crypto stable coin project which is code-named Libra is thought to be put up for a test run in India, many crypto and Bitcoin advocates in the country believe that the project might go through strict crypto regulations in the country as there is already a ban on banking in crypto.
Why Facebook chose India?
India’s government does have a banking ban on crypto, so why chose it?
Well… many founders of the crypto start-ups in the country intend to believe that Facebook’s blockchain network wouldn’t really require the banking system for purchasing or trading the digital currency. This can be the reason for the social media giants come towards India to test its crypto project, knowing well that the state of crypto regulations in the country is quite easy to handle. Another good reason for Facebook to select India for testing of the stable coin could be the millions of active users that the social media possesses in the country, and an upper number of internet and social media presence of India’s population since the last 4 years. The Early report speculates Mark Zuckerberg’s cryptocurrency will facilitate overseas remittance payments for Indian WhatsApp users. The cryptocurrency is expected to be a “stablecoin” pegged to the value of the local currency of the country.
“If this ( FB’s Stable coin) becomes a reality it will change the entire crypto industry. Facebook may not have to worry if the currency operates within their platforms, There isn’t a law which prevents users within a platform from exchanging value, for example, in the form tokens, between each other,”
WazirX, a cryptocurrency exchange’s founder Nischal Shetty demonstrated why Facebook might not have any interactions or a problem with the authorities over the test run for their crypto project
The banking ban on crypto in India has been quite misunderstood as the blanket ban in many states and regions of the country, which has lead to confusion and chaos amongst society.
The RBI ( Reserve bank of India ) is being quite optimistic about the basis of the technology of crypto i.e. blockchain and DLT. The bank has even started a sandbox program as well. But, the crypto use along with the banking ban has made many crypto start-ups and exchanges in the country to close down their operations, as it kept getting extremely difficult for them to assist with banking services to the customers.
Mark Zuckerberg stated at the present month’s developer conference that sending payments should be as easy as sending a photo to each other. This has made everyone certain that Facebook is going head-on with peer-to-peer payments.
“I believe that it should be as easy to send money to someone as it is to send a photo,”
Mark Zuckerberg mentioned.
Major investor and the head of crypto merchant bank Mike Novogratz talked about Facebook’s plans and called them out to be “stunningly important.”
“I think it’s a stunningly important thing. I think it’s a good thing for the entire space. You’ve got one of the largest companies in the world saying ‘we believe in cryptocurrency.’” – Mike Novogratz
The billionaire investor also had to say that Facebook presence in the space will give the ecosystem a new height of credibility. He has believed that it will give institutional investors the confidence to get off the side-lines and finally invest in digital assets.
“It’s not going to be small. To me, it’s a step function of credentialization and credibility.”
He did mention that Facebook’s impact depends on adopting a decentralized model, instead of a centralized payment service.