Facebook wants to test its cryptocurrency in a country that’s trying to ban it altogether

Facebook wants to test its cryptocurrency in a country that’s trying to ban it altogether
Facebook's CEO, Mark Zuckerberg, testifies at a joint hearing of the Senate Judiciary and Commerce committees on Capitol Hill in Washington D.CIANS

  • India is going to be the testing grounds for Facebook’s attempt at building a ‘stable’ cryptocurrency.
  • The tech giant plans to pilot the stablecoin project in India as the country’s market still has room to expand, according to industry insiders.
  • India’s central bank has not been very welcoming to the idea of virtual currencies.
Most crypto currencies are infamous for their volatility but Facebook is trying to change that. And, India might have the front row seats to the social networking giant’s first attempt at building a stablecoin according to Bloomberg.

Facebook's has also reportedly set up a company called 'Libra Networks' in Geneva,Switzerland that will working on building the virtual currency for social networking giant.

Insiders say that India has been chosen for pilot testing the virtual currency, as the country’s cryptocurrency market has room to expand.
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The ultimate aim is to target the Indian remittances market using the stablecoin via WhatsApp, to facilitate overseas transactions.

India’s indecision


But Facebook might have got the timing wrong. India’s central bank, the Reserve Bank of India (RBI), has clamped down on virtual currencies, banning new investments and future transactions — much to the dismay of its passionate advocates.

The ban came in despite media reports that a government committee had favoured virtual currencies in India, just a few weeks back. A member of the committee had stated, “There is a general consensus that cryptocurrency cannot be dismissed as completely illegal. It needs to be legalized with strong riders.”

The Indian government is looking to make it the ban official with ‘Banning of Cryptocurrencies and Regulation of Official Digital Currencies bill 2019’, a draft bill that is yet to turn into law, under the Prevention of Money Laundering Act (PMLA).

Troubled waters for Facebook

Facebook-owned WhatsApp Pay has been in the beta testing mode, for over a year now with no signs of an official launch in the horizon.

The primary reason for that is RBI’s new data localization policy which requires all financial data of Indian users to stored on local servers — a roadblock Facebook is yet to overcome.

When it comes to stablecoin or what some call ‘Project:Libra’, most of the details are classified. But, insiders say that Facebook’s new cryptocurrency could be either be pegged to the US dollar or a basket of currencies, to keep it stable.

Facebook is expected to make an official announcement about stablecoin in the next quarter but an official launch is still far away.

Perhaps, by the time that it’s ready to go live, India’s digital economy will be more accepting.

See also:

Hackers stole $40 million of bitcoin from one of the world's largest crypto-exchanges

Facebook is working on a secret plan - code-named 'Project Libra' - to build a cryptocurrency network

Indian cryptocurrency exchanges looking for leeway from RBI