Less than 3 weeks after Supreme Court of India’s historic judgement to lift an earlier RBI ban on cryptocurrency trading, India is already witnessing intensified activity in the domain. While Binance, one of the world’s largest crypto trading platforms announced a $50 million India-focused blockchain fund last week, its CoinDCX this time, that is in the news.
CoinDCX, for those unaware, is one of India’s largest cryptocurrency exchanges. And as soon as Supreme Court lifted ban on trading, the exchange is announcing a $3 million capital raise from multiple backers, including Bain Capital Ventures. The round, is a testimony to the global appreciation of a progressive stance taken by the Supreme Court, despite India’s banking regulator RBI’s unwillingness at various levels.
The virtual currency trading platform said it would use the funds to promote adoption of cryptocurrencies as well as boost product development and marketing. Investors in the funding round included veteran crypto investor Polychain Capital and HDR Global Trading, which operates the crypto exchange BitMEX.
“India is a market with a huge potential for cryptocurrencies,” said Sumit Gupta, co-founder and chief executive officer of CoinDCX. “Crypto as an asset class is poised for takeoff.”
The Indian Supreme Court’s judgement finally opened the gates for cryptocurrency startups to legally function in the country. The judgement made an RBI ban of April 2018, null and void. The RBI, in its ban in 2018, had ordered all banks and non-banking financial companies to stop providing any services to entities that were trading in cryptocurrencies. This, not only went on to show the inability of one of the world’s oldest federal banks to comprehend virtual currencies, it shut the door for startups in the sector, once and for all.
As a result, many startups, who had ventured into this sector with high hopes, started phasing out. And while some of them like CoinDCX, Koinex and Zebpay did manage to survive, all had to take alternate routes. Zebpay and CoinDCX shifted base to Singapore. CoinDCX began peer-to-peer trading to keep itself afloat. “We were one of the three exchanges that stayed operational during the ban,” Gupta said.
WazirX, a rather new entrant to the space (and one which came post the ban), took an innovative route to create a P2P cryptocurrency exchange platform, more like a ‘Tinder for Crypto’. WazirX was ultimately acquired by world’s largest crytpocurrency exchanges by volume, the Europe-based Binance. The two recently announced a $50 Million ‘Blockchain for India’ fund as well.
Things however, have started to change. The Supreme court ruling allowed Indian users, banished from the crypto space for close to two years, to start trading in Indian Rupee, legally. CoinDCX became the first cryptocurrency exchange in India to integrate bank account transfers and allow users to instantly buy and sell cryptocurrencies with Indian rupee. It has pledged $1.3 million to a campaign entitled TryCrypto, which aims to bring the total number of crypto users in India to 50 million. Currently, the number is estimated to be a tenth of that.