Facebook Libra what is it?

There is a lot of confusion around Libra ( UPI equivalent for FB libra.org) - I have tried to search posts of various experts and sharing below a basic understanding in the Indian context

A.what is Libra? - It is a cryptocurrency - It is a Facebook coin that's it and nowhere close to Blockchain crypto like $BTC

B. How is it different? - It’s backed by equivalent reserves managed by the Libra Association. It’s stable-ish.

 C.What is Calibra?

Calibra is a centralized wallet (Like Paytm) run by Facebook to store, send, spend Libra integrated with Whatsapp and FB Messenger.It is registered as a money transmitter (MSB) in the US. It will have to do the same in India as a pre paid wallet.

D. Can it launch in India?

For launching in India, Libra will have to hold reserves of India rupee to ensure that circulating Libra in India is backed by Rupees in their reserves. they may form association ( can be read as cartel with existing players ( Phonepe, Paytm etc )

E.How is it different than UPI?

It’s quite similar but still different. UPI needs participation from banks and trust in NPCI. Libra removes that completely. Banks or NPCI aren’t involved in the process. It’s tech companies who will be the new enablers of banking, directly.

F. What's more in store ( value adds )

UPI isn't programmable money. Libra is. Any company can write smart contracts to create complex financial applications with a new programming language ‘move’. , chargebacks, SIPs can be written inherently without banking APIs. This is fintech nirvana.

Finally.. Can Libra be legal is India? The short answer is, yes.

Main issues – Money Laundering, Capital Flight and Investor Protection. All these issues can be solved within the Indian legal framework by enforcing some guidelines.

 Money Laundering – All users holding Libra will be KYC’ed and onramp/offramp for Libra enabled via RBI regulated entities. So all transactions are tracked and connected to KYC’ed accounts.

The audit trail also exists by default since it's already a pseudonymous currency.

Capital flight will remain the top concern. Ideally anyone should be able to send Libra globally but India can create guidelines for council members to restrict Indian users from sending Libra to only Indian KYC’ed users and maybe US? ($80B transactions on this corridor)

 Investor protection – This one is easy for Libra. It’s less likely to be perceived and linked to a Ponzi scheme since the price is stable and backed by Rupees. Can’t sell get rich quick dream.

Reserve management - RBI can force Libra Association to manage their Indian rupee reserves within the Indian jurisdiction and reserves kept with Indian banks. No capital flight.

Same has happened for data protection in India forcing companies to keep data in India...

Conclusion.

India is facebook's biggest market and it will go to extreme lengths to comply with regulations to serve Indian customers.India has seen the benefits of an open framework with UPI. Libra is the best bet to explain Indian regulators the benefits of opening up further

some other reads:

https://satoshiand.co/facebook-says-hello-to-crypto-announces-libra-calibra/