With the RBI’s latest clarification on crypto transactions, the legal hurdles are slowly fading away and Indian crypto companies are racing to launch new products
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.
We believe that the recent developments in the Indian crypto market also call for a deep dive and better insights for all stakeholders, be they startups, investors or the masses keen to put their money in these digital assets. That’s one of the reasons we have been scripting the journey of India’s crypto economy for the last four years through our weekly series — Crypto This Week.
After completing 190 editions last month, we are very happy to announce our weekly newsletter — India’s Crypto Economy.
We will connect with you every week via this route and talk about crypto events in length and breadth.
Now, let us take a look at the week gone by from the lens of crypto!
Those with a great retentive memory may still remember the October 2018 incident when Bengaluru-based crypto startup Unocoin’s cofounder Harish BV was arrested for installing India’s first crypto ATM at the Kemp Fort Mall. Due to this untoward occurrence alongside a series of notifications and clarifications issued by the Reserve Bank of India and the finance ministry over the years, crypto innovations in India have been strictly limited.
Cut to the present day, and one can easily notice the Indian crypto industry’s slow but steady coming of age. For one, many crypto startups have started offering a wide range of services, including futures trading, P2P lending, NFTs or non-fungible tokens for blockchain-bound artwork and more.
For instance, ZebPay, one of the oldest Indian exchanges in the crypto space, has entered the P2P lending arena by offering traders a couple of options to lend their cryptos at variable rates. Unocoin, Vauld and CoinDCX used to offer the same service before ZebPay got into it.
Well, lending is not the only thing that India’s crypto startups are exploring. In the past few months, we have seen a series of announcements, including:
- In February this year, CoinDCX launched a trading platform called Cosmex that provides a comprehensive crypto trading solution for spot, margin and derivative instruments.
- After lending, ZebPay is now planning to launch Zebb, a simple app that will allow users to buy and sell bitcoin.
- Unocoin is enhancing product features so that one can pay insurance premium or electricity/DTH bill using bitcoin. A prepaid card is also in the pipeline for the company.
- After the New York-based NFT marketplace OpenSea made quite a buzz worldwide, crypto exchange WazirX has now rolled out South Asia’s first NFT marketplace. It has also committed 50,000 WazirX tokens (WRX ~ $1.8), the platform’s native token, as a community bonus to encourage collectors.
New In Crypto Town! A CryptoVoxels Gallery Celebrating Toy Face NFTs
If you are an NFT enthusiast, this one is for you.
Amrit Pal Singh, a 3D illustrator and art director commissioned by the likes of Google, Snapchat, Netflix, Pinterest, Ola and Gowalla, has built a Toy Face Cafe, a CryptoVoxels gallery celebrating Toy Face NFTs, featuring the work of global artists. You can spend hours exploring the beautiful artwork (I have spent two hours already :p)
What’s more? Well, you can even play the piano!
Crypto This Week | News Doing The Rounds
El Salvador Becomes The First Country To Make Bitcoin A Legal Tender
“The purpose of this law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out,” the law reads.
According to the country’s President Nayib Bukele, if 1% of bitcoin is invested in El Salvador (located in Central America), it would increase the country’s GDP by 25%. “70% of El Salvador’s population doesn’t have a bank account and work in the formal economy. Financial inclusion is not only a moral imperative, but also a way to grow the country’s economy, providing access to credit, savings and investment and secure transactions,” he tweeted.
Not just this, the country will mine cryptocurrency using geothermal energy from volcanos. On Twitter, President highlighted that state-owned geothermal electric company — LaGeoSV has been asked to prepare a plan to offer its facilities for bitcoin mining with cheap, 100% clean, 100% renewable, 0 emissions energy from volcanos.
Well, RBI Still Has “Major Concerns” Regarding Crypto Trade
“We have major concerns on cryptocurrency, which we have conveyed to the government,” RBI governor Shaktikanta Das said during a press conference. He also added that central banks don’t give any investment-related advice. “It’s up to each investor to make his own appraisal, to do his own due diligence and take a very careful call with regard to his own investments,” he added.
This statement comes a few days after the RBI issued a clarification regarding banks blocking crypto transactions citing the central bank’s 2018 notification. Earlier, several Indian banks had refused to allow account holders to make payments to crypto exchanges. Banks had threatened to suspend credit cards used for crypto transactions, citing the 2018 RBI notification banning crypto. However, the notification was quashed a year ago. Following this, HDFC bank told its users to avoid the previous warning.
Nandan Nilekani Wants Crypto To Be Treated As An Asset Class In India
Nandan Nilekani, Infosys cofounder and the architect of India’s Aadhaar programme, backed the use of crypto as an investment asset class, to be bought and sold like a commodity or shares. Nilekani claimed that enabling individuals and businesses to tap the $1.5 Tn market would allow the crypto industry to generate wealth and add value to India’s economy.
“Just like you have some of your assets in gold or real estate, you can have some of your assets in crypto… I think there’s a role for crypto as a stored value but certainly not in a transactional sense,” Nilekani told the FT.
Despite the lack of a legal framework and policy flip-flops, India’s crypto industry has not only survived and thrived, but also won crucial legal battles against the RBI and other authorities. Now that the air has been cleared and investors are betting big on crypto startups in India, most crypto companies and innovators are looking forward to more tailwinds and an upcoming boom. Meanwhile, we will continue to report how crypto 2.0 is shaping up across the country and an unbiased view of the way ahead.
That’s all for this week, let us know how you found this first edition!
See you next week,