India's Crypto Economy
India's Crypto Economy is a brand-new weekly newsletter (delivered every Thursday) from Inc42 to help you decode the rapidly growing crypto economy and its implications on business, work and life. We launched this newsletter on the 4th anniversary of our weekly series “Crypto This Week” which completed 190 editions in May, 2021.
This is the 29th and final edition of “India’s Crypto Economy”, where we recapped the most exciting developments from the world of crypto. Hope you enjoyed this journey and do let us know your feedback and thoughts on this and other Inc42 newsletters.
Did you notice how the crypto ads stopped popping up 📲 across digital platforms, print media and TV channels all of a sudden, just as suddenly as the floodgates had opened a few weeks ago?
Almost all major crypto exchanges put their brand promotions on hold 🖐 since Prime Minister Narendra Modi chaired a high-level meeting, voicing concerns regarding “overpromising” and “non-transparent” advertising.
Meanwhile, the long-pending Crypto Bill 📄 has been swept under the carpet again, and the crypto community is still facing regulatory uncertainty that may put their financial future at risk.
But before we take a look at the current scenario and what it means for the crypto enthusiasts in India, here is a quick look at the weekly highlights.
- ⚖️Is Web 3.0 Centralised? Web 2.0 has always been a centralised network, but the decentralised Web 3.0 will be a disruptive power — this is the general perception among the tech community so far. However, Twitter’s cofounder and former CEO Jack Dorsey and Tesla boss Elon Musk seem to think otherwise. In a recent tweet, Dorsey criticised Web 3.0 as “a centralized entity with a different label”, while Musk asked, “Has anyone seen Web 3.0?” Read it here.
- 📓RBI On Crypto: In a recent meeting, the central board of directors of the RBI reportedly agreed on imposing a blanket ban on crypto. Read in detail.
Focus On Investor Education As Ads Take a Backseat 👩🏫
The sudden and overwhelming crypto promotions have come to a stop since PM Narendra Modi’s high-level meeting last month. All major crypto exchanges have gone slow on crypto advertising and celebrity endorsements that drew flak as ‘misleading’ and could hurt retail investors. Amid the lack of regulation and a well-structured ad policy, crypto exchanges have changed tack and currently focus on creating awareness among users.
🗣Speaking to Inc42, Nischal Shetty, founder and CEO of Binance-owned crypto exchange WazirX, said, “Currently, we are spending nothing on TV or print advertisements. But we have partnerships with media outlets, and we are using those for investor education. As for promotional activities, our goal has always been to focus on responsible marketing and spreading education among the masses about crypto. We want to bring crypto awareness and understanding to the Indian mainstream.”
Elsewhere, both CoinDCX and CoinSwitch Kuber have reportedly stopped advertising on TV and print platforms. ❌
Manhar Garegrat, executive director (policy and special projects) at CoinDCX, said, “As an exchange, we understand that crypto education is the need of the hour. Therefore, we are moving forward, and you will see a lot more activity from our educational initiative DCX Learn to create awareness around crypto so that consumers understand the asset class better and make informed decisions.”
⏱Crypto Entities Await An Ad Policy: While the government has been in touch with the Advertising Standards Council of India (a voluntary self-regulatory organisation) regarding a crypto ad policy and its requirements, the industry lobby IAMAI-BACC is also developing a granular ad policy.
Commenting on the initiative, Garegrat said, “As part of the BACC efforts, we are developing these new policies and looking forward to working closely with the government, all relevant agencies and the larger industry to devise balanced guidelines with a focus on consumer protection.”
⌛️The Policy Framework Is Delayed, Again: The Crypto Bill was not brought to the Floor this time, although it was listed for the Winter Session of Parliament, and the same can be taken up during the upcoming Budget Session. There was a mention of an old Bill during the Monsoon Session, but it had to be reworked because there were other dimensions. The continuous deferment may not be healthy for an industry. But most crypto founders in India have welcomed it as they believe that a policy delay is always better than an outright ban.
“The Crypto Bill might not have been presented in this session, but the stride we have made towards crypto regulation is commendable. There were rumours about a crypto ban in January. But later on, our finance minister said India would take a calibrated approach towards crypto. The Parliamentary Standing Committee invited a public consultation. And finally, our Prime Minister came forward, calling for crypto regulation in India,” Shetty of WazirX recounted the entire journey.
“As part of the IAMAI-BACC initiative, we came up with a self-regulatory code of conduct for crypto exchanges in India. WazirX also launched India’s first crypto exchange transparency report and a policy think tank [Blockchain Papers] to add credibility to the ecosystem. All in all, I firmly believe that Indians and the crypto community have done a great job at furthering crypto education. The process of crypto regulation is in the works, and we will have regulatory clarity soon,” he added.
For Binge Reading 📚
💰Crypto Scams Totalled $7.7 Bn In 2021: In its latest report, Chainalysis has once again marked crypto scams as the biggest crypto-based crime by transaction volume. In 2021, crypto scam victims worldwide lost more than $7.7 Bn worth of cryptocurrencies. This is 81% more compared to 2020.
💡Most Powerful People In Crypto: In this article, The Economist has shortlisted four self-made crypto billionaires, including Coinbase founder and CEO Brian Armstrong, Binance founder and CEO Changpeng Zhao, BitMEX founder and CEO Arthur Hayes and FTX founder Sam Bankman-Fried. Read and listen to them in Money Talks.
Tweet Of The Week 💬
In crypto, DAOs (decentralised autonomous organisations) are often perceived as more democratic and decentralised in nature compared to listed companies. Are DAOs as democratic, transparent and decentralised as they claim to be? 🤔
Yes, that’s a question mark.
News Doing The Rounds 📰
📌Polygon To Back Web3 Startups: Ethereum scaling and infra development platform Polygon (formerly Matic Network) and the US-based venture capital fund Seven Seven Six joined hands to launch a $200 Mn initiative to invest in Web3 social media and gaming projects.
📬Unocoin’s Shake and Earn: Bengaluru-based crypto exchange Unocoin recently introduced a ‘Shake and Earn’ feature for buying Satoshi, the smallest unit of bitcoin. This feature enables automatic credit of Satoshis in the wallet when one opens the Unocoin app and shakes the phone.
🛎NITI Aayog Chairman On Crypto: “If we go by the latest industry reports, there are more than 230 startups in the crypto space with almost $270 Mn invested in the Indian blockchain and crypto startups,” said Amitabh Kant, chairman of the policy think tank NITI Aayog. In an interview, Kant also advocated for ‘soft-touch regulation’.
“Without getting into the merits, I feel what we need is a well-curated, pro-innovation-led soft-touch regulation in this sector that can ensure the protection of investors’ interests and address concerns surrounding the misuse of technology,” he added.
So far, the government has been relying on the RBI’s stand that a blanket ban should be imposed on crypto. But with other think tanks calling for a soft-touch approach, there is a greater possibility that the authorities will choose the middle path.
Till next week,