The cryptocurrency industry is in talks with the Indian government and regulators to assuage their concerns about the sector, said Ashish Singhal, the Co-founder and CEO of CoinSwitch. He was speaking to Bloomberg TV’s Rishaad Salamat & Haslinda Amin on “Bloomberg Markets: Asia” on Tuesday.
The crypto platform which recently raised US$ 260 million at close to US$ 2 billion valuations has about 10 million users on its exchange — and about half of them are around their mid-20s. Most of the users on the crypto platform are long term investors and not mere speculators according to Ashish Singhal.
He said the crypto industry is in a question-and-answer phase with regulators and has made “amazing progress.” “Regulators are engaging with industry leaders like us and industry bodies and trying to understand cryptocurrencies — and we do understand the stance of the government,” Singhal responded to a query on regulatory developments.
“There are some fundamental flaws in the crypto ecosystem which do not abide by the laws of the land in India,” he added.
In 2018, the country’s central bank (RBI) effectively banned crypto transactions by prohibiting the regulated entities from dealing with crypto companies which was ultimately struck down by the Supreme Court as unconstitutional.
Now, the central bank is working on a digital currency and the government may bring in a crypto bill for cabinet approval soon. According to the blockchain intelligence firm Chainalysis, India’s crypto market grew 640% in the 12 months through June standing second among countries in terms of growth.
“The idea is not to shut crypto down, but how to plug those holes. Crypto can be the next Internet itself and India would not definitely want to miss out on that,” Singhal said.
The Indian crypto industry has emerged as one of the busiest in terms of deal-making in the year 2021. The total risk funding in domestic crypto and blockchain startups shot up to $587.16 Mn as of October 17 this year, compared to $37 Mn in the previous year.
Investors in Indian crypto startups include prominent crypto names – Sam Bankman-Fried’s Alameda Research, crypto exchange Kraken, Galaxy Digital, Solana Capital, Borderless Capital, and Republic Crypto. Other notable investors are BlackPine, NGC Ventures, CoinFund, LD Capital, AU21 Capital, Cultur3 Capital, Long Term Ventures, Afton Capital, and CSP DAO along with traditional VC firms like A16Z, Tiger Global, SoftBank.