Crypto exchanges are back in business, as more investors find refuge in virtual currencies with share markets and traditional assets taking a beating over worries about the health of the economy battered by the coronavirus outbreak.
Not only are the old exchanges, which were lying low after the Reserve Bank of India in April 2018 virtually banned trading in cryptocurrency, seeing a huge rise in the business, new ones are also coming up to cash in on the increased interest. The RBI ban was struck down by the Supreme Court on March 4, 2020.
“The pandemic has caused many people to hedge their investments by buying into crypto. Since it is online, there is much lesser risk of the pandemic affecting this,” said Nischal Shetty, co-founder of crypto exchange WazirX. “Further people have time now and they are finding newer ways of investing and learning about this as an alternate asset class.”
The crypto rush
Payment gateway companies are also looking for integration with these exchanges, hoping to drive volumes as people will be buying cryptocurrency with the Indian rupee.
Exchanges are looking for payment gateways to offer settlements via net banking, wallets, cards and other digital payment modes. This will make exchange between crypto and government denominated currencies smooth and allow new users to join in.
Bitcoin is the most well-known cryptocurrency, while trading happens in coins such as Etherium, Zilica and others.
While few of the larger banks are still treading with caution, some have opened up to do business with these exchanges, industry insiders told Moneycontrol.
A banker even said that after the Supreme Court decision, it would be illegal not to work with these platforms.
“Few banks are waiting to hear from the central bank. If they are open to us working with these platforms we are ready to do business with them. Till date the RBI has not said anything,” a banker with a private sector lender said on condition of anonymity.