Crypto has maintained its store of value and has seen a surge of interest in the Indian market, while other traditional commodities and asset classes such as gold, oil and equities have taken a nosedive, according to CoinDCX’ co-founders Neeraj Khandelwal and Sumit Gupta.
The Mumbai-based financial services firm was founded in 2017 and is a pioneer in the Indian cryptocurrency exchange industry.
“With greater regulatory clarification, there is high potential for job creation that will in turn catapult India into the global crypto spotlight”, the company said in an interview with Finance Magnates.
Growing volumes during Covid-19 crisis
Despite the ongoing global economic downturn caused by the Covid-19 pandemic, the cryptocurrency industry in India has been experiencing a resurgence in user demand and spike in trading volumes. Volumes on CoinDCX grew by 47%, according to the firm.
“It’s safe to say that Covid-19 hasn’t negatively impacted the cryptocurrency space”, the co-founders said.
In their view, the cause of this is two-fold.
“Firstly, the Supreme Court’s overturn of a banking restriction on the crypto industry in March helped to add a layer of credibility to the use of cryptocurrencies. When the banking ban was lifted, CoinDCX was the first Indian exchange to enable bank transfers. This meant that Indian users could finally buy cryptocurrencies through Indian Rupees (INR) with their own bank accounts on our exchange,” the co-founders explained.
“We have also seen an influx of foreign investments into the cryptocurrency industry, with CoinDCX securing investments from renowned global players such as Polychain Capital, Bain Capital Ventures, and HDR Global Trading, Operator of BitMEX,” they added.
Secondly, they believe that there has been a sustained national interest and curiosity in cryptocurrencies on the back of the favourable Supreme Court verdict that was enhanced by India’s stay-at-home orders during the Covid-19 crisis.
Growing demand for crypto
To meet the new demand for knowledge about the benefits of crypto and how to trade the asset class, CoinDCX launched a crypto adoption campaign, #TryCrypto, to provide crypto-related education so Indian users can learn to engage in the asset class in an informed and safe manner.
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The firm onboarded nearly 50,000 users in at the end of April and early May. It also saw significant uptick in trading volumes.
CoinDCX sees a lot of untapped potential in India when it comes to the crypto space, as the country already boasts an extremely tech-savvy population withhigh mobile penetration.
“India’s government has also been very supportive of blockchain technology in general, with very promising use cases. The most recent government-based blockchain project is Vajra which was designed by the National Payments Corporation of India. The Vajra platform can be accessed by various payment companies for providing secured transactions on their online platforms or mobile applications. Another example is Andhra Pradesh, a state in the south-eastern coastal region of India, which is using blockchain for land registrations to remove manual interference,” Gupta and Khandelwal explained.
However, they believe that India can benefit from greater clarity in crypto regulation in order to protect users and encourage investors to leverage this nascent asset class and protect their wealth, especially during turbulent times.
Banking ban impact
The Reserve Bank of India’s banking ban on the crypto industry was a major challenge for Indian crypto exchanges.
CoinDCX was officially launched just two days after the RBI announced the banking ban. As a result, the firm had to innovate in order to adjust to the ban while also providing our users with tools that they needed.
“We started as a crypto-to-crypto exchange, but soon introduced a peer-to-peer fiat on ramp/off ramp product called DCXinsta. Through our innovations, we were able to not only survive, but thrive, providing a trusted platform for Indian crypto traders to enter the asset class”, the company said.
After the banking ban was lifted, CoinDCX was able to integrate bank transfers. Since then, it has seen several new players in the Indian crypto space, which is a positive sign for the market.
“Competition is always good”, Gupta and Khaldelwal noted.