Facebook recently announced that it is working on a digital currency of its own called the Libra. Powered by blockchain technology, this global currency plans to replace your digital wallet. The tech company that has a significant hold in the social media space with Facebook, Instagram and WhatsApp, is now looking to take over the way you make payments.
According to the company's statement, this digital currency will be available on Facebook Messenger, WhatsApp and over a standalone app called 'Calibra' to send and receive it. It also plans on providing additional facilities like paying bills, or riding the local public without using cash.
Facebook has partnered with Paypal to launch Libra which will be enhanced using the new blockchain built exclusively for it and backed by a reserve of real assets (called the Libra Reserve) to provide enhanced stability, low inflation and global acceptance.
Will Libra be made available in India?
At present use of cryptocurrencies like bitcoin is illegal and similar restrictions may be imposed on Libra.
However, Facebook's digital currency has been projected to be different from other global accepted cryptocurrencies including bitcoin and ethereum. These currencies gained popularity for being decentralized and highly volatile. People around the world were interested in investing and speculating using these currencies.
On the other hand, Libra is expected to be pegged to a basket of traditional currencies (that are regulated by central banks of various countries) and its value will not fluctuate like that of bitcoin, making it not much of an investment vehicle for retail investors.
Further, the Reserve Bank of India (RBI) has stringent regulations for payments companies. While Calibra is said to be an improved and cheaper way to make crossborder payments compared to the existing remittance system, Facebook will have comply with the AML (anti money laundering) and monetary control requirements.
In February 2018, the social media giant had launched unified payments interface (UPI) in beta version of WhatsApp but was never officially rolled out for public use.
Amid the privacy allegations on Facebook and strict data localisation rules imposed by the RBI on payments companies and banks operating in India, only time can tell if Indians will be able to use the digital currency.