India's Crypto Industry Is Bullish on Largest-Ever FDI in Tech Sector From Facebook

Published at: April 23, 2020

Leading figures in India’s crypto industry are reading positive signs from Facebook’s $5.7 billion investment in India's largest mobile operator. 

First reported on April 22, Facebook’s deal with Jio Platforms — the digital technology unit of billionaire Mukesh Ambani’s oil-to-retail conglomerate Reliance Industries — represents the largest-ever foreign direct investment in India’s tech sector.  

Facebook will take a 9.9% stake in the business, whose services include the mobile network Reliance Jio, which has drawn 388 million users to date. 

Last fall, Reliance Jio Infocomm had installed what Ambani claimed was ostensibly one of the world’s largest blockchain networks “with tens of thousands of nodes operational on day one," and conducted the country’s first-ever blockchain-enabled letter of credit transaction.

In response to the news, Nischal Shetty, founder and CEO of one of India’s most prominent exchanges, WazirX, tweeted:

“Clear signs of Crypto emerging as a popular technology in India. Facebook investing $5.7B in Jio is great news for Indian Crypto ecosystem. FB has Libra. Jio has been working on Blockchain Crypto tech. Libra may become a reality in India.”

Reliance Jio’s vast user base is of particular importance as the fresh investment includes a commercial partnership with Facebook’s subsidiary WhatsApp — one of the three platforms proposed by Facebook for the rollout of its planned stablecoin Libra.

Jio Platforms also operates the e-commerce platform JioMart, which reportedly serves 30 million small retailers nationwide.

Bernstein analysts proposed yesterday that the investment provides Facebook with “a closed network of 388 million users to test on, proof point around the already announced partnership to build and test a WeChat-like app." 

The tech giant is now the business’s largest minority shareholder, with the fresh capital expected to accelerate Jio’s digital monetization roadmap and help it to become net debt-free within a year.

A fresh start

As reported, industry veteran WazirX was acquired by Binance in fall of last year and the two exchanges jointly launched a $50 million fund aimed at fostering blockchain development in India this March.

India’s cryptocurrency space has seen a wave of optimism following the reversal of a longstanding ban on banks’ dealings with crypto-related firms by the Supreme Court earlier this year. 

Facebook has meanwhile been working to adapt the white paper for its proposed stablecoin in an attempt to make the project more palatable for global regulators.

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