Published: March 31st, 2020
Just months after the Supreme Court of India reversed a decision by the Reserve Bank of India (RBI) to ban cryptocurrency trading, the world’s biggest crypto exchanged are zeroing in on the Indian cryptocurrency market. Binance has since acquired WazirX, an Indian cryptocurrency exchange while BitMEX put about $3 million in CoinDCX, another Indian exchange. Will this interest transform India into a monumental cryptocurrency market?
Just weeks after the Supreme Court of India reversed the country’s central bank’s decision to ban trade in cryptocurrency, the industry’s big players are already trooping into India. In anticipation of a good environment, Binance, the leading cryptocurrency exchange by customer base acquired WazirX, a cryptocurrency exchange based in India. BitMEX also invested $3 million via a funding round in a Mumbai-based crypto exchange called CoinDCX.
The said ban had been in force since April 2018 and had curtailed several cryptocurrency-based activities for India’s population of 1.3 billion people. The landmark March 4, ruling now makes cryptocurrency trade both legal and open.
In November 2019, Binance bought WazirX for an undisclosed sum. The deal, according to the CEO of WazirX, Nischal Shetty, was done to give Binance a foothold of India and its more than 1 billion possible customers. Through the partnership, Indians can now exchange cryptocurrency for the local Indian rupee (INR).
All the 20 members of staff of WazirX are now employees of Binance. WazirX, however, continues to run independently of its parent company. However, the acquisition opened up another fiat-to-cryptocurrency gateway for the world’s biggest exchange.
Binance understands that fiat ramps are a critical player in deciding the rate of adoption of cryptocurrency markets. For that reason, the crypto exchange is seeking to further partnerships with the world’s major traders. WazirX which has a tested technology that is applicable in the futures’ peer-to-peer crypto trade will help Binance to drive mass adoption according to the COO of WazirX, Siddharth Menon.
Already, Binance is integrating P2P auto-matching engine into the exchange’s gateway. The undertaking will make it easier for the population of India to access cryptocurrency. The said integration, when complete, will make it easy for users to buy USDT using INR from WazirX and then trade the stablecoin for a cryptocurrency of their choice among the assets listed on Binance.
According to Shetty, the next wave of mass cryptocurrency adoption will be driven by users in the developing economies. He adds that India, with its more than 1 billion prospective customers, is poised for massive adoption. Shetty says that the working arrangement with Binance gives WazirX a chance to not only cater to the population of India but also help other developing nations that may want to create fiat on-ramps.
Elsewhere, about a week ago, several investors including Ben Delo, the co-founder of BitMEX through HDR Global Trading, raised a total of $3 million and put into CoinDCX, a leading cryptocurrency exchange in India. The move signaled the global investors’ interest in the cryptocurrency space in India.
Following the country’s Supreme Court ruling on cryptocurrency trading, India is now a favorable environment for enthusiasts. CoinDCX said it will use the capital injection to promote cryptocurrency adoption in the Asian nation and beyond.
The spare cash will go into product development and marketing the platform, a press release by the cryptocurrency exchange added.
Aside from the BitMEX CEO, CoinDCX also got funds from Polychain Capital, a renowned investor in the blockchain space.
A statement by CoinDCX says that since the court ruling and the overt interest from cryptocurrency investors, the number of users in India has jumped tenfold.
The Cryptocurrency market in India holds what is probably the greatest promise on the globe. According to the CoinDCX’s cofounder and CEO Sumit Gupta, India’s market can morph into one of the greatest. He added that cryptocurrencies as an asset class are well-placed for takeoff in India because of the nature of the country’s population. He thinks that because the country has more than 200 million unbanked citizens, the huge multimillion-dollar remittance industry makes the Asian nation a fertile territory for anyone that is developing cryptocurrency payment solutions.
As such, CoinDCX plans to introduce a platform where more Indian nationals can buy cryptocurrency with a diverse variety of fiat currencies. Besides, the exchange will construct a trading platform that relies on an algorithm.
Another product that CoinDCX has lined up is a crypto-to-crypto trading product. The exchange was introduced above the same time that the RBI banned cryptocurrency trading. As such, CoinDCX relied on P2P trading services for survival.
While the cryptocurrency community relishes the changes, not everyone is happy. Mukul Shrivastava, a partner at Ernst & Young and the audit firm’s forensic and integrity services head appealed for caution. He termed the developments as a bagful of both risks and rewards.
He said that the ensuing playing field will benefit traders who know how to smell technological advances that bear benefits.
Mukul advised individuals that want to take advantage of the robust environment created so far to first gain the necessary information and qualification and be cognizant of all the relevant terms of the economy in question. He added that cryptocurrency exchanges, traders and consumers can only create a broader and profitable ecosystem if they value innovations and are aware of the possible threat-mitigation measures they can apply whenever necessary.
Garrick Hileman who heads the research arm of Blockchain.com has a different outlook. He is full of praise for the changes. According to him, India is the best breeding ground for the adoption and use of both cryptocurrencies and digital assets since the country’s economy is already zooming towards a cashless status.
Two leading cryptocurrencies have set foot in India to make the most of the favorable regulations and the country’s huge population. Binance and BitMEX both bought into two of the leading cryptocurrency exchanges in the Asian country. Whether other players will come in is now not a matter of if but when.