July 9, 2019, | AtoZ Markets - The latest report in Bloomberg about Indian authorities attitude toward upcoming Facebook Libra stablecoin is hinting, that in India Libra coin is not welcome and Asia’s third-largest economy is not keen on allowing the crypto in the country. At the same time the local media report, that central bank of China is developing its own cryptocurrency in response to Facebook Libra.
Facebook Libra not to be available in India
Atoz Markets has already reported that the much-awaited Facebook Libra will not launch in India due to the Reserve Bank of India (RBI) ban of blockchain-based currency transactions. According to the financial institution’s circular, released in April, entities regulated by the RBI shall not deal in digital currencies or provide services for facilitating any person or entity in dealing with or settling cryptos.
The crypto experts were sure that Indian regulations might not be a problem for Facebook Libra’s "closed system", as RBI had not imposed any restrictions on the peer-to-peer transactions.
However, current India’s authorities opinion might raise concerns in the crypto community about Facebook Libra coin’s future in this country.
Facebook Libra coin structure raises Indian authorities’ concerns
In his latest interview with Bloomberg, Subhash Garg, Economic Affairs Secretary at India’s Ministry of Finance noted, that Facebook Libra design has not been fully explained. Subhash Garg concluded, that private crypto, like Libra is not something they have been comfortable with.
Dovey Wan a founding partner of Primitive Ventures believes that Libra carries the risk of becoming a financial monopoly and can have a massive impact on the regulatory system. Wan assumes that “Facebook can easily leverage its enormous user base of over two billion people worldwide to quickly achieve economies of scale and the attendant network effect.”
Indian ban’s impact on Facebook Libra coin
Last week, the head of Facebook Messenger David Marcus published an official letter in which made clear that with Libra and its associated Calibra wallet Facebook wanted to reach unbanked consumers and give them access to financial services.
Marcus noted, Libra would lower the drawbridges to financial services for anyone with “a $40 smartphone and connectivity.”
It is worth to mention, that India has the second-largest unbanked population in the world and 260 million Facebook users.
Libra coin launch is expected in the first half of next year and a ban on the Facebook coin in India makes it unavailable for the country’s citizens.
Notable, that India is considering a complete ban of cryptos, with a proposal to enforce a 10-year prison term for citizens who deal with these digital assets.
Facebook Libra forces China to develop a national crypto
While India is considering to ban Facebook Libra in the region, the People’s Bank of China (PBoC) announced developing its own cryptocurrency.
According to the media reports, Wang Xin, director of a (PBoC) research bureau explained that the bank decided to create its own crypto specifically because of the “unclear role of the US dollar once Libra is issued”.
Wang Xin is concerned if Libra was able to function as money would it have a large influence on monetary policy, financial stability, and the international monetary system.
As per the latest media reports, PBoC received approval from the chief Chinese administrative authority, the State Council, to begin work with other market participants and institutions on its cryptocurrency.
In addition, scientists from Peking University, Renmin University, Zhejiang University, and Shanghai Jiao Tong University have expressed their commitment to the PBoC project.
It is worth to mention China's plan to develop state crypto comes at a time when the local authorities have taken hard measures toward cryptocurrency trading, banning bitcoin trading, initial coin offerings, and crypto exchanges.
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