Days after an Indian government official expressed discomfort with Facebook’s cryptocurrency plans, the social media giant has indicated that it has ‘no plans to offer’ Libra, or its digital wallet Calibra, in its largest market.
According to the Economic Times, a Facebook spokesperson cited India’s harsh anti-cryptocurrency stance as its reason to stay away from the world’s second-most populous country:
As you may know, there are local restrictions within India that made a launch of Calibra not possible at this time.
India ‘uncomfortable’ with private cryptocurrencies including Libra
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Earlier this week, CCN.com reported that India’s Economics Affairs Secretary Subhash Garg had indicated that Libra was unlikely to get a go-ahead from the government. Garg argued that Libra would likely meet the same treatment as other cryptocurrencies.
Since the start of 2018, India has taken various steps that have impacted negatively on the country’s cryptocurrency sector. Last year in April the Reserve Bank of India ordered banks under its regulatory ambit not to offer their services to crypto-related businesses. This had the effect of forcing cryptocurrency businesses to either cease operations, scale back or move abroad.
Just late last month India’s Bitcoin exchange Koinex closed shop just as it was nearing its second-year anniversary. This followed in the footsteps of other major exchanges including Zebpay which shut down last year in late September.
India loses out to Malta
While Koinex did not immediately reveal any plans to launch operations abroad, Zebpay has managed to stay alive by relocating. Currently, Zebpay is headquartered in Malta from where it is able to serve 22 countries mostly located in Europe. Zebpay also recently set up operations in Australia.
Besides RBI restricting banks from servicing crypto-related businesses, reports have surfaced indicating that there is a proposed piece of legislation, the ‘Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019’, that is aimed at criminalizing cryptocurrency mining, buying, holding or selling. Reportedly the draft law is proposing a jail term of up to ten years for anyone caught engaging in any of the above-mentioned cryptocurrency activities.
10-year jail sentence results in FUD
While it is just a proposed law which may or may not be enacted, the draft has already had a negative impact on India’s crypto sector. According to the co-founder and CEO of Koinex, Rahul Raj, the proposed legislation was partially responsible for the closure of the exchange as it caused a severe drop in trading activity due to users fearing the repercussions:
…a proposed piece of legislation called the ‘Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019’ has created enough FUD in the Indian crypto trading community to result into a sharp decline in trading volumes and instil a clear discomfort for all the law-abiding citizens of this great nation.
While Facebook’s old motto may have been to ‘move fast and break things’, in India the social media giant is taking a completely different approach with regards to Libra. Its rallying call now appears to be ‘don’t move there or they will break you’.
Last modified: March 4, 2021 2:37 PM