Social media giant Facebook’s decision to pick up a minority stake in Reliance Industries-owned Jio is likely to boost the adoption of cryptocurrency and blockchain technology in the country.
According to experts tracking this development, this may result in Reliance Jio piloting a cryptocurrency that can be unilaterally used for discounts or reward points within its telecom, entertainment and e-commerce businesses, once regulatory hurdles are cleared. The behemoth is also expected to look at using blockchain technology for easing supply chain constraints, they said.
“It certainly is a significant development considering that both the giants have a massive interest in blockchain and cryptocurrency. It will only be a matter of time before we see the two forces join to bring in some blockchain or cryptocurrency-based payments into the already thriving digital payment space in India,” said Ashish Singhal, co-founder and CEO of Cruxpay—a cryptocurrency exchange aggregator platform.
Singhal also said the Mukesh Ambani-led conglomerate may use blockchain technology for tracking inventory of Kirana stores and thereby also use of a stable coin like Libra or other crypto assets for payments. This comes as Jio Mart has already started interacting with customers of Kirana stores on the use of WhatsApp for grocery orders in Navi Mumbai, Thane and Kalyan in Mumbai.
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“When Facebook and Jio combine, it’s an obvious next step for them to explore blockchain crypto-related initiatives in India. Both are highly innovative companies and I don’t think that they would sit on the sidelines while the world moves ahead in crypto,” said Nischal Shetty, founder of WazirX, a cryptocurrency exchange backed by Binance. Binance is the world’s largest cryptocurrency exchange in terms of trading volumes.
“WhatsApp trying to crack ‘payments’ market in India also brightens the chance for crypto initiatives emerging from this partnership,” Shetty said, adding that a crypto loyalty token that can be used in Facebook and Jio properties would be a good first step to attract users for early adoption.
“Another possibility could be deploying a centralised closed-system, a unidirectional cryptocurrency that could be used only in the Reliance universe of Jio phone, Ajio e-commerce store or JioMart,” said Ashim Sood, a Supreme Court lawyer, who appeared for the Internet and Mobile Association of India (IAMAI), which had obtained a favourable ruling last month in the case of the Reserve Bank of India’s ban on cryptocurrency.
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It is similar to a reward points system or video-game points that can be exchanged for discounts which will have a straightforward valuation and which could limit speculation.
Last week, Facebook announced it would invest Rs 43,547 crore ($5.7 billion) in RIL’s wholly-owned subsidiary Jio Platforms to expand its presence in India for a 9.9 per cent stake in Jio. This transaction also marked the largest foreign direct investment for a minority investment in India.
Last August, Mukesh Ambani announced to build the world’s largest blockchain networks in the world with tens of thousands of nodes, at the company’s annual general meeting.
