Remaining crypto exchanges in India bet on global markets, Technology News, ETtech

Crypto currency exchanges such as WazirX and CoinDCX are betting on global markets after Koinex shut down operations last week citing an unclear regulatory framework for such exchanges in India.

Crypto currency exchanges are trying options including crypto-to-crypto-transaction s, peer-to-peer transactions, and entry into foreign markets to survive the uncertain phase, industry experts say, although these come with challenges ranging from low margins, low user growth, lack of funding for user education and global competition.

“We initially wanted to cater only to the Indian market, but if the Indian regulations aren’t favourable we will be looking at focusing on onboarding international users,” said Sumit Gupta, co-founder and CEO of the Bain Capital-backed CoinDCX, which focuses on crypto-to-crypto transactions.

The startup said earlier this year that it had 50,000 users and processes about a million dollars in average trading volume daily.

Mumbai-based WazirX, which launched its global operations around four months back, said its P2P and crypto-to-crypto transactions have been growing at more than 20% monthly.

Nischal Shetty, founder of WazirX, however told ET that India’s cryptocurrency-banking ban has stagnated growth for such exchanges overall and the right set of regulations could drastically drive up the user base and transaction levels.

Currently, awareness among users is quite low, which makes them reluctant to trade in crypto currencies, he added.

To resolve this, WazirX is trying to make it easier to onboard and guide new users for transactions in digital currencies.

Investors are also reluctant to infuse money into these startups, experts tracking the space say, adding fundraising would become easier once they start addressing the global market.

“The remaining players are doing a commendable job in a very tough environment,” says Nitin Sharma, an angel investor, and founder of Incrypt Blockchain.

“Some are still seeing growth points to the massive latent demand for digital assets exposure, especially from millennials,” Sharma says.

Even though there has been a global resurgence of interest in crypto, India has missed out and the outlook for exchanges is not positive until sensible regulations are put in place, he says.

Investments through venture capital, or ICOs, in India’s blockchain and cryptocurrency startups have been extremely low due to a lack of regulatory clarity, according to a Nasscom report.

About $8.5 million has been infused so far, with investments in the Indian blockchain ecosystem at less than 0.2% of the global total.

In April, ET reported that cryptocurrency exchange Unocoin had fired half of its remaining employees, in a bid to conserve cash after talks to raise another round of funding failed to take off. Other exchanges, including Coindelta, Coinome and Zebpay, have also shut down due to the uncertain regulatory environment in the past year.

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