Amid India’s unclear policies for cryptocurrency, many of the global company’s are investing in the country’s cryptocurrency industry.
Binance, the world’s largest cryptocurrency exchange by trading volume, invested in the Indian cryptocurrency exchange, WazirX in November 2019. Then in 2020, another Indian cryptocurrency exchange popularly known as CoinDCX received an investment from a Seychelles-based BitMEX and San Fransico-based Coinbase.
Notably in 2018, the Reserve bank of India (RBI) restricted the Indian financial institutions from offering their services in crypto-related activities. Despite knowing the fact, the foreign companies showed their interest in the Indian cryptocurrency industry and invested in the companies.
However, two years later the ban was revoked by the Supreme Court of India, but the RBI informally urged the banks to cut off their ties with the cryptocurrency industry. Resulting to that, now, the Indian crypto exchanges are functioning but without getting any support from banks.
According to Harish BV, the co-founder of Unocoin, “There is an increasing trend of foreign cryptocurrency exchanges investing in Indian cryptocurrency exchanges. It is because India has a population of 139 crore that is predominantly young which is seen as tech-savvy and more adaptable to crypto saving.”
In 2018, the cryptocurrency industry almost ended up in India. Along with RBI’s ban, the former finance minister of the country, Arun Jaitley, released a statement specifying that government neither recognizes crypto as legal tender nor a coin. He further mentioned that the government would take certain measures to eliminate the illegal usage of cryptocurrency in the country.
However, in 2020, after the Indian apex court’s decision of removing the ban from ban related to crypto activities, the investors returned to the market with a vengeance.
Within a week the trading volume, sign-ups on crypto exchanges reached very high.
Since the time CoinDCX has been launched many investors are lending their support to the company, continuously, says Sumit Gupta, the CEO of the Indian cryptocurrency exchange.
Further, he mentioned that despite the policy uncertainty in the country, the investors show their trust in the company.
We @WazirXIndia got more customer signups in the first 6 days of April 2021 than the entire first 6 months of 2020.
We’re learning and scaling. We’ll continue to work hard on ensuring our users have the best experience ✌️#IndiaWantsCrypto
— Nischal (WazirX) ⚡️ (@NischalShetty) April 7, 2021
As per the report, the huge cash reserves held by the cryptocurrency exchanges worldwide, are another reason for driving investment into India.
The global crypto exchanges acquire a huge amount of cash which they use as an investment to enter into new markets around the world.