CoinSwitch To Launch Stock Trading Vertical To Take On Zerodha, Groww

Cryptocurrency unicorn CoinSwitch is reportedly planning to launch a stock trading vertical, setting itself up against the likes of Zerodha, Groww and Upstox, among others.

The crypto platform is planning to apply for a stockbroker’s licence with the Securities and Exchange Board of India (SEBI). The company is also said to be talking with several non-banking financial companies (NBFCs) and banks to offer fixed deposits. The vertical’s launch comes as part of CoinSwitch’s larger plans to pivot into a wealthtech platform.

The crypto trading platform recently announced its plans to offer conventional investment products such as mutual funds, US stocks and so on to diversify in light of recent struggles of cryptocurrency across the world, not just in India.

For instance, while Bitcoin’s price has improved in the past six months or so, it is still half its November 2021 peak. Other major cryptocurrencies have also taken a battering in terms of market cap and value. India’s strict crypto regulations and taxation have also added to the crypto trading platforms’ struggle. This has incentivised them to diversify into more mainstream fintech products and services.

However, the recent government hike in tax collected at source (TCS) on foreign remittances under the Liberalised Remittance Scheme (LRS) has seen platforms offering US stocks steer away from the same, including CoinSwitch.

“Our vision for CoinSwitch has always been to develop it into a wealth-tech platform tailored specifically for Indians,” said CoinSwitch cofounder and CEO Ashish Singhal told Inc42.

Singhal added, “Today, more than 19 Mn Indians have initiated their investment journey on our platform, with crypto. We aim to grow alongside them by offering a diverse range of asset classes, on our wealth tech platform, that is simplified, and tailored to their requirements.”

CoinSwitch said it has scaled its technology infrastructure and brought industry experts on board to strengthen its leadership team.

The news of a stock trading vertical comes nearly nine months after CoinSwitch launched CoinSwitch Pro, a multi-exchange trading platform that allows users to trade crypto assets in Indian Rupees across multiple exchanges with a single login.

CoinSwitch looks set to enter a crowded market with startup brokers and conventional brokers aplenty. Several traditional fintechs, including Paytm and PhonePe, also offer stock trading on their platforms, making the market all the more competitive.

Be that as it may, even these stock trading platforms have been having a tough time as stock markets continue to witness high volatility. For instance, Upstox had nearly 2.8 Mn active users at the end of March 2023, having lost nearly as many users since June 2022. During the same time, Zerodha lost around 200K active users as well.

Founded in 2017 by Singhal, Govind Soni and Vimal Sagar Tiwari, CoinSwitch, a Coinbase Ventures and Andreessen Horowitz (a16z)-backed unicorn, is a global aggregator of cryptocurrency exchanges. The startup has raised nearly $300 Mn so far, with its latest round being its $260 Mn Series C unicorn round in October 2021.