CrossTower, a US-based digital asset trading platform, has set up shop in India with CrossTower India shaking off concerns on regulatory uncertainty around crypto, the company announced in a press release. The company was founded by Chief Executive Officer Kapil Rathi and President Kristin Boggiano in 2019, and it now operates crypto exchanges in eighty-one countries.
The company has also established a local unit for which it has hired thirty-five people to date, according to a Reuters report. The company is offering over forty cryptocurrencies in Indian rupees to its users.
Cryptocurrencies are gaining traction among Indians given the young demographic of the country. India ranked second in terms of crypto adoption among 154 countries, as per the 2021 Global Crypto Adoption Index by Chainalysis, a blockchain data platform. The sector is unregulated but that has not dented the aspirations of millions of Indians who view crypto as an emerging asset class.
What brings CrossTower to India?
The company believes that it is a pivotal moment to enter India given the rapid growth of the Indian crypto market.
“The Indian cryptocurrency market grew from $923 million in April, 2020, to a staggering $6.6 billion in May, 2021, which is an average of over 50 percent growth every month. With over 1.5 crore Indians invested in crypto already, the Indian market is positioned to significantly grow,” CrossTower said in a statement.
Kapil Rathi said that the new generation of investors in India has embraced crypto as a tool for financial freedom. “With advancements in technology, crypto markets have proven a key driver in the democratisation of wealth,” Rathi added.
“We believe we are taking a calculated risk. We plan to use the country as a hub to expand into other geographies,” Rathi was quoted as saying by Reuters.
Several global exchanges are exploring India as a lucrative destination despite an unfavourable regulatory environment, Reuters added. Binance, the world’s largest crypto exchange, established its footprint in India after it bought WazirX in 2019. Coinbase announced plans for a back office in India recently, the Economic Times reported.
According to the ET report, the following crypto exchanges are also considering entering India:
Low-down on cryptocurrency regulations in India
India has been on the fence about cryptocurrencies as there is no law governing the crypto ecosystem. It has, however, not affected the risk appetite of investors as rumours of a crypto bill being in the works have dominated the news since 2019.
- The Reserve Bank of India banned regulated entities including banks from providing services to crypto exchanges in 2018. It said that cryptocurrencies raise concerns of “consumer protection, market integrity, and money laundering, among others”.
- A report by the Finance Ministry in 2019 (the report was drafted in 2017 but never made public) advocated for a ban on the use of cryptocurrency in India. The report was drafted by an inter-ministerial committee chaired by the secretary of the Department of Economic Affairs Subhash Chandra Garg.
- The RBI ban was then overturned by the Supreme Court of India in 2020 which said that the move was “disproportionate”. It led to a surge in sign-ups across various crypto exchanges in 2020.
- The Government of India said that it was looking to table the crypto bill before the Parliament so as to ensure there is clarity and transparency on the state of cryptocurrency in India.
- The RBI is also working towards a “phased implementation strategy” for the introduction of central bank-backed digital currency (CBDC), Digital Rupee, and examining use cases to ensure that its execution does not cause any disruption. It is targetting a December rollout.
- Finance Minister Nirmala Sitharaman informed the media in August that the proposed legislation on cryptocurrencies has been tabled before the Cabinet and is awaiting its approval.
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- When it comes to crypto assets as currency, risks outweigh benefits: IMF warns
- Cryptocurrency: Small cities register growth of 2648 percent in user sign-ups on WazirX
- Will Allow ‘Experiments’ In Cryptocurrency, Says Finance Minister Nirmala Sitharaman
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