Crypto on Govt desk, high international buyers put in $500 million this 12 months

INCREASED LIQUIDITY in international monetary markets and the Supreme Court order early final 12 months permitting use of banking infrastructure by cryptocurrency platforms has led to high funding corporations, resembling Tiger Global, Sequoia Capital, B Capital and Andreessen Horowitz, pumping in over half-a-billion {dollars} in India’s cryptocurrency and blockchain know-how area in 2021 to this point.

This is nearly eight instances the funding raised by corporations on this section cumulatively within the previous 4 years. The pattern assumes added significance within the wake of the Government signalling Tuesday its intent to deliver a Bill prohibiting “all private cryptocurrencies in India”, with “certain exceptions”.

The single greatest chunk of fund-raising by a cryptocurrency platform in India was introduced on October 6 when CoinSwitch Kuber raised $260 million in a spherical led by Andreessen Horowitz and Coinbase Ventures, with present buyers Sequoia Capital India, Tiger Global, Paradigm and Ribbit Capital additionally taking part.

The funding spherical additionally catapulted the cryptocurrency platform into the unicorn membership with a valuation of $1.9 billion, nearly 4 instances the $500 million it was final valued at lower than six months in the past.

The surge in funding from international buyers is a transparent indicator of the scale to which buying and selling and funding in digital currencies has grown within the absence of clear tips regulating the area. According to conservative estimates, India has round 15 million folks concerned with buying and selling or investments in cryptocurrencies — almost 60 per cent of the 25 million buyers in its 58-year outdated mutual fund business.

Information from knowledge intelligence platform Tracxn reveals that corporations within the cryptocurrency and blockchain area have raised $503.98 million in 2021 so removed from international marquee enterprise capital and personal fairness buyers. Crypto alternate Coinbase’s enterprise arm, fintech agency CRED’s founder Kunal Shah, decentralised finance developer Andre Cronje, and billionaire investor Mark Cuban have featured within the listing of these investing on this area in India.

Of the overall quantity raised, the information present, start-ups working cryptocurrency exchanges and buying and selling platforms alone raised a bulk of the quantity: $427.53 million. These funding corporations have additionally backed a few of India’s greatest names within the tech and start-up segments, together with Flipkart, Byju’s, Meesho, PharmEasy, Zomato, Unacademy, Urban Company.

In April 2018, the RBI took a stance on cryptocurrencies and banned all banks from coping with digital currencies, successfully reducing off the cash provide into these digital belongings. However, in March 2020, the Supreme Court overturned the ban.

Currently, the Government is engaged in detailed discussions with consultants and business associations on regulation and taxation of cryptocurrency. Earlier this month, Prime Minister Narendra Modi had chaired a gathering through which it was agreed that the steps taken will likely be “progressive and forward-looking”.

Significantly, most massive banks, together with State Bank of India, ICICI Bank, HDFC Bank, haven’t but allowed use of their infrastructure by these exchanges.

The banks to have partnered among the largest cryptocurrency exchanges, resembling WazirX, CoinDCX, and so on., embody Punjab National Bank, IDFC First Bank, Federal Bank, Deutsche Bank, Bank of India, Bank of Maharashtra and Indian Bank.

In 2020, funding in cryptocurrency and blockchain know-how platforms was solely $32.30 million by 17 funding rounds. Yet, this was almost 3 times the $11.10 million raised on this section in 2019. In 2018, the quantity was barely greater at $13.51 million.

According to knowledge from Coinmarketcap, an information platform owned by the world’s largest cryptocurrency alternate Binance, 5 India-based cryptocurrency exchanges — WazirX (owned by Binance), CoinDCX, Giottus, Zebpay and Bitbns — collectively clocked 24-hour buying and selling volumes of $977.68 million on the spot market as of Wednesday night.

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