The Indian cryptocurrency sector is being cautious about the recent moves into digital currency by social media giant Facebook. However, they also consider it a step towards the legitimization of crypto in the country.
Facebook is reportedly working on a dollar-pegged stablecoin dubbed Project Libra. This coin may be used for facilitating advertising on the platform, and users may be given fractions of the coin to view ads. While the company is keeping the project under the wraps, Indian crypto industry is growing weary of its eventual launch. According to Indian crypto businesses, Facebook’s entry into the market could be both a problem and a boon for the industry.
India’s Unique Challenges
Facebook and its suite of products are very popular in India, and the company may want to target the Indian market first. The current regulations in the country do not allow banking entities to work with digital currency companies or facilitate crypto transactions. Facebook may be able to bypass these regulations by using peer-to-peer transactions of its coin.
Local media outlet Economic Times reported that Indian companies believe that Facebook could provide legitimacy to the crypto industry. Crypto exchange WazirX’s founder Nischal Shetty noted:
“If this (Facebook’s stablecoin) becomes a reality it will change the entire crypto industry…Facebook may not have to worry if the currency operates within their platforms. There isn’t a law which prevents users within a platform from exchanging value, for example, in the form tokens, between each other.”
His views were echoed by Unocoin founder Sathvik Vishwanath who said that Facebook’s use of crypto in WhatsApp payments makes the technology legitimate. He said that Facebook’s move is good news as it will bring a more positive approach towards the users.
Not Everyone Feels Excited
A stablecoin startup called RupeeCoin is trying to bring an Indian Rupee-equivalent cryptocurrency to the market, targeting the South Asian market. The Adam Syed promoted company wrote on Twitter recently that Facebook’s project is interesting, but the industry should be cautious about it. They pointed out the lack of proper crypto rules in the country and Facebook’s tainted record with information management.
Facebook Did Not Respond to Queries by Press Time
The Indian crypto companies are struggling to bring a supportive legal framework in the country. While the Reserve Bank of India is positively inclined towards blockchain technology, it has a hawkish view of cryptocurrencies. The companies are now fighting a case in the Supreme Court against the regulator’s ban. The next hearing will take place in July.