Barring the perennial concern of lack of regulation for crypto in India, the year has been a fruitful one for the Indian crypto ecosystem
Trading volumes for domestic crypto exchanges have soared, while foreign crypto giants are looking to enter the Indian market
The inclusion of crypto startups in a MeitY-backed startup accelerator signals a shift in the Indian government’s stance towards the technology
As the pandemic year comes to an end, Indian crypto exchange and other industry stakeholders would be wondering if the rapid strides made by the ecosystem in 2020, would continue unabated next year.
Barring the perennial concern of lack of regulation for crypto in India, the year has been a fruitful one for the Indian crypto ecosystem. After the Supreme Court quashed the Reserve Bank of India’s banking ban on cryptocurrencies, trading volumes soared on some of India’s major crypto exchanges. This was complemented by a rise in unique signups on some of these crypto exchanges. Nischal Shetty, the founder and CEO of Binance-owned WazirX, told Inc42 that monthly trading volumes on his platform have surged 301% between March and November.
International crypto companies such as Cashaa and Coinbase are also planning to aggressively tap into the Indian market, while some noted crypto giants, such as early backer of Tesla and Twitter, Draper Associates, as well as Binance, have invested in Indian crypto startups this year.
The positivity has continued into this week.
Bitcoin marketplace Paxful has analysed data for bitcoins traded through its platform from 2015-20 in 28 countries. According to the data, India ranks second, after China, as one of the leading Bitcoin trading countries in Asia, both in terms of the volume of bitcoins traded, and their value. From 2015-20, India traded 10,017 bitcoins worth $94.7 Mn, second only to China, which traded 20,553 bitcoins worth $181 Mn. The data is publicly available on Coin Dance.
Meanwhile, Indian crypto and blockchain startups have also been invited to apply for the second cohort of the StartupToScaleUp accelerator, being run by The GAIN (Global Accelerator for Innovation Network) and supported by India’s Ministry of Electronics and Information Technology (MeitY)
It is worth noting that the inclusion of crypto startups in an official startup accelerator signals a shift in the Indian government’s stance towards the technology. Last year, cryptocurrency startups were left out of the Reserve Bank of India’s regulatory sandbox, which is a framework that allows fintech startups and other innovators to conduct live experiments in a controlled environment to demonstrate the use cases of their product, under a regulator’s supervision.
The launch of the official accelerator also begs the question of whether the government is getting more and more serious about regulating the sector rather than simply banning the tech.
In light of a number of crypto scams in recent times, including one uncovered this month in Gujarat, many investors and founders have called for more clarity from policymakers on how to approach customer education or even create awareness about the pitfalls of falling for cryptocurrency cons. With billions of dollars often at stake in crypto scams, regulation for the sector would help prevent significant revenue leakage.
To push for regulation for crypto, Indian law firm Khaitan and Company, along with Crebaco Global, a credit rating and audit firm for blockchain and cryptocurrency will submit a representation to the Indian government by December-end, urging it to bring in concrete regulations for the cryptocurrency and blockchain industry.
Other News
- After being approved for a graded rollout in India last month, Facebook-owned messaging platform WhatsApp’s payments application WhatsApp Payments (WhatsApp Pay) is partnering with banks and financial institutions in the country for a broader rollout. The company’s India head Abhijit Bose had said earlier this year that WhatsApp Pay would look to extend micro-credit and insurance facilities to tier 2 and 3 cities as well as rural areas.
- The Securities and Exchange Board of India (SEBI) has relaxed the norms to allow fintech startups and other entities to enter the mutual fund (MF) business. Until now, the regulator required entrants to have five years of experience in the financial services business and demonstrate three years of profitability, and to maintain a net worth of INR 50 Cr. However, SEBI has now waived these norms.
- Bitcoin marketplace Paxful analysed data for bitcoins traded through its platform from 2015-20 in 28 countries. According to the data, India ranks second, after China, as one of the leading Bitcoin trading countries in Asia, both in terms of the volume of bitcoins traded, and their value. From 2015-20, India traded 10,017 bitcoins worth $94.7 Mn, second only to China, which traded 20,553 bitcoins worth $181 Mn. The data is publicly available on Coin Dance.
- With the centre approving the National Digital Health Mission’s health data management policy this week, we analysed whether the coming of the policy before a personal data protection law in the country would bode well for India’s bid to power healthcare through digital highways in the 21st century. You can read the full story here.
- Facebook India head Ajit Mohan has pushed for a unified global framework for internet regulations, to ensure that the internet remains open, connected and continues to drive innovation for the next 20 years. Speaking at the Global Technology Summit, 2020, organised by Carnegie India on Thursday (December 17), Mohan said the US, Europe and India should lead the process of the formulation of such a global framework.
- A recent report titled, Fairwork India Ratings 2020: Labour Standards in the Platform Economy, ranks some of the prominent Indian companies based on the working conditions prevalent there for temporary workers. The report, in its second year of publication, assesses companies against five principles, namely, fair play, fair conditions, fair contracts, fair management and fair representation. The report’s findings aren’t encouraging, as foodtech unicorns Swiggy and Zomato, as well as cab aggregator Uber, have been scored a paltry 1 out of 10 when judged against the criteria mentioned above.
From the funding and acquisitions corner, about $980.6 Mn was invested across 23 Indian startups this week, and two companies were acquired.
From the movers and shakers corner, MobiKwik has appointed Siddharth Dhamija as CEO of Zaakpay.
We will be back with next week’s News Roundup.