India remains one of the more hostile countries when it comes to cryptocurrencies. Facebook’s proposed Libra crypto hasn’t been exempted from this crypto aversion.
However, authorities in New Delhi aren’t the only ones wary of Libra. In fact, since the project’s white paper was published, there has been a significant global backlash against Facebook’s foray into the crypto payment arena.
India Remains Wary About Facebook
According to a report by the New Indian Express, the issue of cryptocurrencies, Libra inclusive, was discussed at a recent meeting of the World Bank and the International Monetary Fund (IMF) held in the U.S. Present at the meeting was India’s Finance Minister, Nirmala Sitharaman, who stated that India echoed the concern of other governments concerning Libra and other cryptocurrencies.
Sitharaman speaking specifically on the issue of Libra, said:
“On our side, the Reserve Bank Governor spoke about it during our turn to intervene. I got the sense that many countries were cautioning on rushing into this. Countries will have to show extreme caution much before anything is said or moved on this.”
The current Managing Director of the IMF, Kristalina Georgieva, also said that financial bodies have been actively investigating cryptocurrencies. The IMF boss added that while virtual currencies have their benefits, they could be used for fraudulent activities – a popular refrain employed by crypto critics in government and regulatory agencies
India’s Long-Standing Anti-Crypto Policies
India’s stance on Facebook’s Libra comes as no surprise, considering the country’s turbulent relationship with bitcoin and other crypto tokens. Following the RBI ban prohibiting commercial banks from offering banking services in 2018, there has been an ongoing battle between the Indian central bank and the crypto community.
These stringent measures have led to crypto exchanges like Zebpay and Coinome to shut down their services in India and move to other jurisdictions with crypto-friendly regulations. In the wake of the legal tussle, the country’s supreme court asked the Union of India to enact regulations for bitcoin and other cryptos
Back in July, an inter-ministerial committee set up to look into crypto regulations submitted a recommendation for a blanket ban on cryptocurrencies in India. A supposed draft bill revealed that any individual holding or trading crypto could face a five-year or ten-year prison term in addition to a fine.
However, India’s Minister of State for Finance, Anurag Thakur, came out to state that the country had no intention of banning bitcoin. Some stakeholders opine that a ban on bitcoin and other cryptos will be bad for the country.
Libra Continues to Brave Growing Regulatory Storm
India’s reticence aside, Libra has faced mounting regulatory scrutiny from various financial regulators around the world. Consequently, initial backers like PayPal, Visa, and Mastercard, reportedly pulled out of the Libra project.
Two U.S. Senators reportedly tried to persuade three online payment companies, namely Visa, Mastercard, and Stripe, to double-check their involvement in the Libra crypto project. According to the senators, regulators; Libra Association members and the U.S. Congress didn’t have sufficient information regarding Libra and the risks associated with the virtual currency.
The U.S. senators highlighted Facebook’s previous brushes with privacy scandals and the potentially negative impact such an association could have on the goodwill of their respective payment companies.
European and Chinese authorities have voiced concerns about Facebook’s Libra, with some officials worried that the Libra digital currency would threaten sovereign currencies. France’s Finance Minister, Bruno Le Maire of France called for stringent regulations for Libra and also vowed to prevent the stablecoin from launching in Europe.