The mega Facebook-Jio deal could pave the way for the expansion of cryptocurrencies in India driven by the former’s own digital currency Libra.
Last year, Facebook assembled a gaggle of companies to make an open-source cryptocurrency Libra, which could potentially be used as a payment option in applications like Messenger and WhatsApp.
Facebook, world’s largest social media company, recently invested $5.7 billion for a 9.99% stake in Reliance Jio Platforms. Experts see this as a chance for both companies to tap into the digital payments market while also promoting blockchain innovation in India.
Reliance Jio Infocomm Ltd (Jio) has already pledged to develop the most important blockchain network within the world. the corporate made a politician statement during the annual general meeting (AGM) on 12 August last year that it plans to put in a pan-India blockchain network for industries.
So far, only startups are involved in blockchain and cryptocurrencies but experts believe Reliance and Facebook’s entry into the bandwagon might be a game changer.
“We are cognizant of Jio’s involvement in blockchain technology also as Facebook’s Libra project. When these two combine, it’s a clear next step for them to explore blockchain crypto-related initiatives in India. Both are highly innovative companies and that i don’t think that they might sit on the sidelines while the planet moves ahead in crypto,” said Nischal Shetty, founder & CEO, WazirX, one among India’s leading crypto exchanges.
Moreover, as WhatsApp with its 400 million users, has been trying to enter payments in India, “there may be a excellent chance, we’ll see crypto initiatives emerging from this partnership,” Shetty said. “The partnership makes it easier for both of them to market Libra for WhatsApp users for internal transactions. Libra as an example might be used as credits to shop for items on Jio platform.”
Currently, Facebook-sponsored digital currency Libra is within the process of seeking regulatory approvals in several parts of the planet including within the US and Europe. It’s timely to mention if it’ll be launched in India, whilst the Supreme Court has lifted the Federal Reserve Bank of India (RBI)’s ban on virtual currencies.
“For Libra to eventually become a reality in India, further regulatory clarity is required around cryptocurrencies within the country and should pose a challenge within the short term,” said Sumit Gupta, CEO and cofounder of CoinDCX, Mumbai-based cryptocurrency exchange.
“Though in its nascency, cryptocurrencies are sure to achieve India due to their strong fundamentals and increasing growth and adoption globally. As stablecoins are an excellent way for beginners to urge into cryptocurrencies, the success of Facebook’s Libra are going to be instrumental in ensuring that cryptocurrencies gain mainstream attention and adoption within Indian markets,” he said.
To be sure, regulatory hurdles remain. “While Libra 2.0 attempts to deal with regulatory concerns, it’s still faraway from clear whether it can gain approval in markets like India. Launch approval will likely be needed on a market-by-market basis, and with governments focussed on covid-19 and therefore the resultant depression , we could still see Libra’s launch delayed,” Hileman said.