- Insider sources say Facebook has yet to file an application with the Reserve Bank of India
- The RBI still maintains a draconian stance towards cryptos and it is very unlikely that it would open its doors to Libra
- Project Libra has huge regulatory hurdles to conquer in various jurisdictions if it is to succeed
Facebook has put preparations in top gear to make its dream of launching its Libra cryptocurrency by 2020, a reality. However, a report released by the Economic Times on June 20 has revealed that Facebook’s Libra may not be accepted in India, as the firm has yet to file any form of application with the Reserve Bank of India (RBI).
India has no room for Libra at this time
Per sources close to the matter, the Reserve Bank of India (RBI) is not ready to lift the blanket ban on bitcoin and other blockchain-based digital assets in the region and as such, Facebook’s Libra cryptocurrency may not be available in the country.
In April 2018, the RBI mandated all banks under its purview to desist from servicing bitcoin-linked businesses and insider sources have made it clear that Libra’s Calibra wallet which was released along with the project’s whitepaper on June 18, will not function in jurisdictions where crypto is illegal or Facebook is restricted.
Reportedly, the multi-billion dollar social media powerhouse has yet to hold talks with the RBI even though initial reports hinted that the firm was interested in testing its digital asset in the nation.
Facebook money laundering concerns
Several observers in the Asian nation have opined that since Libra is designed to function as a global cryptocurrency, the RBI may not give it its stamp of approval due to money laundering and other risk concerns.
“If Facebook were to design the Libra to be a closed system, only to be transacted within its network, the RBI should ideally be less concerned, since the cryptocurrency does not interact with the external economy,” declared Anirudh Rastogi, founder, Ikigai Law, a tech-focused Indian law firm.
In the same vein, Salman Waris, managing partner at TechLegis Advocates & Solicitors, a Delhi-based specialist technology law firm stated that local firms that adopt Libra may run afoul of the statutes of the RBI. He said:
“Under Section 79 of the Indian IT Act, Facebook is obligated to take all due care that it’s cryptocurrency is not used for illegal activities like money laundering and bitcoin trading.”
While Facebook is reportedly running a pilot test for a Whatsapp-based payments solution in India, it remains to be seen whether the RBI will also welcome Libra in the same way.