More than three years after India rejected a Facebook initiative to offer free internet service to its citizens terming the gesture ‘digital colonialism’, the social media giant’s cryptocurrency project Libra might meet the same fate in Asia’s third-largest economy.
According to Bloomberg, India’s Economic Affairs Secretary Subhash Garg has indicated that Libra is unlikely to get the government’s nod. Garg hinted that like with all other cryptocurrencies the Indian government will not make an exception in Libra’s case:
Design of the Facebook currency has not been fully explained. But whatever it is, it would be a private cryptocurrency and that’s not something we have been comfortable with.
Just last year the Reserve Bank of India banned all financial institutions under its regulatory ambit from offering services to crypto-related businesses. Among the hardest hit were cryptocurrency exchanges which have since the RBI ban either shut down or moved operations abroad. It has also been previously reported that a draft law aiming to introduce a 10-year jail sentence for mining, buying, holding or selling cryptocurrencies is under consideration.
But while Facebook can still look to other markets if India maintains its current stance on cryptocurrencies, being locked out of the world’s second-most populous country would be a big blow for the social media giant. This is in light of the fact that India is one of Facebook’s biggest and rapidly growing markets for some of its platforms, through which Libra is expected to be rolled out.
With regards to WhatsApp for instance, India is the largest market in the world for the messaging application with over 200 million users. As for Facebook’s main app, it is estimated to have over 300 million users in India alone.
And with Facebook having stated that one of the goals of Libra is to enhance access to financial services for the unbanked, being locked out of India would deny Facebook the second-largest market in the world, by virtue of the unbanked population residing there. Per the World Bank’s statistics compiled two years ago, 11 percent of the world’s unbanked live in India.
China, which has 13 percent of the world’s unbanked, may already be out of reach since Facebook’s apps are already banned there.
Garg’s comments are unlikely to come as a surprise to Facebook though as the tech firm may have already been aware that Libra won’t get an easy passage into India.
Last month CCN.com reported that the Silicon Valley giant had canceled plans to launch in India due to concerns over the harsh cryptocurrency regulations. Before the alleged cancellation, prior reports had indicated that Facebook had picked India as its launch market.