Facebook’s own cryptocurrency is in the pipeline and is expected to launch by the first quarter of next year according to the BBC. Dubbed as “GlobalCoin”, the virtual currency is pegged for an initial launch in around 12 countries – with India being a key focus – and will offer payment options to users without a bank account. Facebook will start testing the currency later this year. According to the report, Mark Zuckerberg has already met with Bank of England governor Mark Carney in April, to discuss the possible opportunities and risks involved in launching a cryptocurrency. The firm has also been in talks with the US Treasury and money transfer companies like Western Union regarding the operational and regulatory framework for dealing with a cryptocurrency. According to a Bloomberg report from December 2018, Facebook was already working on a cryptocurrency technology that will let users transfer money on WhatsApp, focusing on remittances by Indian workers abroad.
Can GlobalCoin fit within India’s legal framework?
Facebook says India will be a key focus area for GlobalCoin, but India’s apex banking regulator as well as Central government have already – at least for all practical purposes – banned cryptocurrencies. In the Union Budget 2018-19, Finance Minister Arun Jaitley had openly declared cryptocurrency as “not a legal tender”, stating that cryptocurrencies were being used to run ponzi schemes. Following that announcement, the RBI had issued a circular to all banks in April, banning the use of cryptocurrency. However, the direction by the RBI was later found out to have not been backed by public consultation or independent research by an RTI enquiry.
The Supreme Court later directed the Centre to come up with a cryptocurrency policy on whether to ban the virtual currency in its entirety or leave a few exceptions. Facebook and GlobalCoin can only expect respite if the Centre does decide to leave a few exceptions. Inter-ministerial consultations were held in April to decide the future of cryptocurrencies in India, and a draft bill titled “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019″ has been shared with relevant government departments for further reviewal. Until the final bill is ratified in the Parliament, there is no formal declaration by the Indian government on the legalisation of cryptocurrencies. Whether the government is planning to put a complete ban on cryptocurrencies remains unclear at the moment.
Facebook had itself banned cryptocurrency ads
Interestingly, Facebook had placed a complete ban on cryptocurrency ads in January 2018, citing the fact that many companies were not acting in “good faith” by advertising binary options, ICOs (initial coin offerings), and cryptocurrencies. Facebook said that violative ads would also be banned from Instagram and Messenger. Six months later, Facebook partially reversed this ban and said it would allow ads and content relating to cryptocurrencies only from “pre-approved advisers”.
Now, advertisers have to go through an application process to be able to promote crypto products. Interested advertisers are now required to show Facebook “licenses they have obtained, whether they are traded on a public stock exchange, and other relevant public backgrounds on their business” in order to receive permission to run crypto ads.
Only crypto ads falling in the ambit of cryptocurrency products and services, education on cryptocurrency, and cryptocurrency industry news would be allowed to run on Facebook and its other platforms. However, the ban on advertisements pertaining to binary offering and ICOs will continue to exist.