Facebook recently announced its ambitious plans to transform global economy by unveiling its new cryptocurrency Libra on Tuesday. Facebook also revealed the digital wallet which will integrate into its messaging applications for seamless transactions of the Libra coin. It promises to empower people 1.7 billion people around the globe who don’t have a bank account. But when the service starts next year a potentially large number of people will perhaps not be able to access it.
“The Libra Blockchain will be global, but it will be up to custodial wallet providers to determine where they will and will not operate. Calibra won’t be available in US-sanctioned countries or countries that ban cryptocurrencies,” a Calibra spokesperson told TechCrunch.
Libra has already been backed by some of the top financial firms like Visa, MasterCard and PayPal. The currency will be a stablecoin which means a real asset will be stored in its reserve for every Libra generated. This would make the digital currency less volatile and stable compared to the contemporary volatile cryptocurrencies like Bitcoin. The currency will be governed by the Libra Association, an independent not-for-profit organization.
The countries where Calibra won’t be available will also India which is one of Facebook’s largest market with more than 260 million users. The company had to take this stand because of India’s take on cryptocurrency. Other countries are the China, Iran and North Korea where Facebook has no presence.
Recently, India drafted a bill proposing banning use of cryptocurrency in the country. This bill if passed, will make mining, generating, holding, buying, selling or dealing in cryptocurrencies “directly or indirectly”, illegal in the country. Any individual or a group found breaking the law will face ten years (non-bailable) jail and a hefty fine. This puts the country against the flow of cryptocurrency revolution.
Calibra wallet will be available on Facebook Messenger and WhatsApp (Facebook-owned messaging platform). The service will be privacy focused and will employ anti-fraud and verification systems used by banks and credit cards. While WhatsApp has released a beta payment feature in India, WhatsApp Pay, it is not to be confused with Calibra.
WhatsApp Pay, which is in beta stage, is based on the Unified Payments Interface (UPI) which is a instant real-time payments system developed by National Payments Corporation of India (NPCI). It was launched three years ago and works under Reserve Bank of India (RBI) and Indian Banks Association. This service soon will be available to users nationwide.
India’s skepticism is hindering the progress of cryptocurrency in the country. However, this skepticism is a logical consequence considering the volatility of the currency and safety issues related to it. If the country doesn’t revise its laws regarding cryptocurrency Facebook is sure to lose a potential market for its new venture.
The cryptocurrency Libra as well as the Calibra wallet will be globally available from next year.