Facebook Can Bypass RBI Crypto Ban, Says Its Coin Is Just Points

This article comes fromEconomictimes, Original Author: Shikha Prasad

Odaily Translator |

Odaily Translator |

Facebook’s stable currency is very mysterious, and few people know the details and progress of the project. The only thing they know now is that they are preparing for the test of the cryptocurrency project code-named “Libra”, and the preferred test location may be in India. However, since the Central Bank of India has previously issued a cryptocurrency ban, requiring local banking and financial institutions not to provide cryptocurrency-related services, many people doubt whether Facebook can successfully carry out the test locally.

Although Facebook has not commented on outside reports so far, according to previous Bloomberg reports, the stablecoin developed by the social media giant will be a cryptocurrency anchored to the U.S. dollar or other "basket" currencies. It is hoped this way to ensure that its value does not fluctuate too much. If all goes well, Facebook will subsequently use the stablecoin on its instant messaging app WhatsApp for cross-border transfer and remittance transactions, and India will become a "testing ground" for Facebook to test this latest product.

It is undeniable that considering the size and scale of Facebook, "Libra" is enough to cause vibrations in the entire encrypted "galaxy".

However, the Indian encryption circle seems to be relatively "calm". They believe that the only benefit of Facebook's move is to allow digital currency to be legalized locally, and if the test is really to be launched, Facebook may bypass the traditional prohibition issued by the Central Bank of India. Ban on banking channels processing digital currency transactions. In addition, Facebook's cryptocurrency peer-to-peer transactions are expected to be processed differently from those of other bitcoin companies, because the "Libra" cryptocurrency project may not need to use bank transfers to buy or sell digital currencies, so it will not be subject to the RBI's encryption ban influence.

Nischal Shetty, founder of cryptocurrency trading platform WazirX, said:"If the Facebook stablecoin becomes a reality, it will definitely change the industry...

In India, as long as P2P digital token transactions do not go through the banking system, they are not affected by the central bank’s ban. Not only that, but India has not enacted any laws prohibiting users on the platform from exchanging digital tokens, so it is likely that Facebook will initially operate a trial run within the scope of this rule.

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However, regulation remains a hurdle for Facebook’s cryptocurrency.

Nitin Sharma, founder of Incrypt Blockchain, believes that if the Facebook cryptocurrency project wants to be deployed on a large scale in India, supervision is still an obstacle they cannot avoid, because with the increasing number of local users, they have to solve Facebook Coin and Indian legal tender Exchanges between rupees, which will certainly require regulatory intervention.

Also think that it is necessary to be cautious about Facebook’s cryptocurrency, as well as the Indian cryptocurrency company RupeeCoin, which focuses on providing a blockchain digital currency anchored to the Indian rupee in Southeast Asia. They believe that due to Facebook’s performance in information management and Not so good, and coupled with the lack of proper rules from the Indian government, deploying Facebook's cryptocurrency may require careful consideration.

Nitin Sharma added that if Facebook’s goal is to transform from an advertising-driven business model to a cryptocurrency-driven business model, and through cryptocurrency to incentivize user participation and promote decentralized identity, it will definitely require all parties (including users, developers, etc.) people, merchants, advertisers, etc.) seamlessly between the fiat currency rupee and the Facebook stablecoin. In this case, the current legal rules are not conducive to Facebook's large-scale deployment of encrypted stablecoin projects in India.

But the problem is that if Facebook chooses to transfer and exchange only on its own internal platform in order to bypass the central bank's encryption ban, it seems to violate their original intention of launching cryptocurrency. Because if Facebook Coin cannot flow out of the system, but only circulates in a closed loop, then it is almost the same as a traditional loyalty point system - people can use this cryptocurrency to obtain services on Facebook, and can also consume within the Facebook system, Or exchange products through cooperative merchants.