China's central bank is creating a cryptocurrency to challenge Libra

Regulators must hold Facebook to its word to live upto Libra's structure Wall Street veteran

China's central bank is creating a cryptocurrency to challenge Libra

And with Facebook having stated that one of the goals of Libra is to enhance access to financial services for the unbanked, being locked out of India would deny Facebook the second-largest market in the world, by virtue of the unbanked population residing there. "But whatever it is, it would be a private cryptocurrency and that's not something we have been comfortable with".

India's central bank, the Reserve Bank of India, has banned banks from dealing in cryptocurrencies but informal networks abound.

David Marcus, Facebook's blockchain lead, responded to Congressional concerns in an open letter of his own this week, assuring lawmakers that Facebook won't have access to personal financial information through Libra.

As SCMP notes, the Libra white paper suggests that the Facebook currency will be pegged to a group of major fiat currencies, which will nearly certainly include the USA dollar. The company hasn't yet formally sought permission from India to launch its digital currency in the country. Furthermore, Facebook did not immediately react to the email looking for remarks on the government's boring response to the arrangements.

While Libra has the potential to become the world's leading money transfer platform, Facebook's data privacy reputation might jeopardize the company's effort to fully capture the market, Fitch rating agency warned.

But before it can tap that huge user base there are regulatory hurdles to be crossed. Several of India's top exchanges have since closed, citing the RBI restriction as the reason for failing business.

The response was made only days prior to the upcoming hearing of Facebook before the Senate committee on July 16.

Mu pointed out that libra transactions, just like payments with other crypto coins, are not limited by national borders and that digital coins can be used for loans. The government is now drafting the "Banning Cryptocurrencies and Regulation of Official Digital Currency Bill 2019" to prohibit mining, holding, buying, or selling cryptocurrencies in the country.

This story has been published from a wire agency feed without modifications to the text.

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