While the Indian Government is struggling to introduce a law against the cryptocurrency industry, many crypto exchanges around the world are exploring ways to enter the Indian market.
If the government imposes a ban on crypto-related activities, it would strangle the economic power of tech-savvy in the nation, says individuals who are against the crypto ban. As per the market analyst, around 15 million people in India invest in cryptocurrency. In total, Indian investors hold over $1.37 billion worth of cryptocurrency.
Currently, many of the global digital exchanges like the US-based Kraken, Hong Kong-based Bitfinex and its rival KuCoin, are exploring the Indian market to expand their business, four unidentified sources told Reuters.
The market analysts believe that if the government does not impose any ban on the Indian crypto industry and gives it full control, soon it could be seen growing.
One of the sources involved with the global crypto exchange, which is investigating the Indian market, said that the companies have already started a discussion on their level to better understand the Indian market and its entry point.
The source has further mentioned that presently, the other two global exchanges are at their initial level. They are deciding whether they should enter the Indian market or not and if they would enter then whether they should set up a subsidiary or merge with an Indian firm as Binance did two years ago.
When contacted the three companies regarding the matter none of them commented on it.
According to data released by CoinMarketCap, all the three exchanges i.e., Bitfinex, KuCoin and Kraken are at the top ten positions based on their traffic, liquidity and trustworthiness of their reported trading volumes.
“The Indian market is huge and it is only starting to grow, if there was more policy certainty by now Indian consumers would have been spoilt for choice in terms of exchanges because everyone wants to be here,” said the founder of digital bank Cashaa, Kumar Gaurav.
On one hand, the proponents of cryptocurrencies are happy, while on the other hand, the officials are worried about the illegal activities which could surge in India through crypto-related activities.
As per the report, India does not have any law to regulate cryptocurrency exchanges in the country. The exchanges that are already operating have registered themselves as tech companies.
Binance is the first global crypto exchange that acquired Wazirx, the Indian crypto trading platform that allows purchasing and selling of crypto in rupees.
It has been reported that Coinbase, the US-based crypto exchange, is planning to set up its back-office in India.
But recently, the regulatory environment has taken a u-turn for cryptocurrencies, globally, therefore, now the Indian authorities are also planning to exercise greater scrutiny to regulate it.
A month ago, China restricted the banks in the country from offering their services for crypto-related activities. Before, that the Indian government was going to present a bill in the Parliament to regulate cryptocurrency. However, the Indian government held it back, and since then very conflicting statements are coming in media regarding the bill.
Meanwhile, many Indian banks started cutting off their ties with crypto exchanges in the country citing RBI’s 2018 circular. Later, the RBI clarified its stance over the issue and the banks had to make a u-turn, as the central bank’s decision was already revoked in 2020 by the Supreme Court of India.
The Indian Central Bank is also planning to introduce its CBDC, which Governor Shaktikanta Das said in February that the ‘work is in progress.’
Despite focusing on the uncertainties, India should look at the bright side, if the global crypto exchanges enter the Indian market, they would add value to it also, it would not be good for the country to miss out on the chance.