When India’s Supreme Court overturned the banking restrictions for crypto exchanges back in March, everything changed.
Since then, Binance joined the Internet and Mobile Association of India (IAMAI), which played a key role in overturning the ban, and noted explosive growth via WazirX, the Indian exchange Binance acquired in 2019. A WazirX spokesperson told CoinDesk the exchange saw 150% more signups in many Indian cities from February to May 2020, which boosted local trading volumes by 66%.
“The Supreme Court’s positive verdict has surely helped in creating positivity around crypto in India,” the spokesperson said.
Read more: Binance Joins Indian Tech Association That Helped Overturn Crypto Banking Ban
As part of that broader sentiment shift, prominent Indian economist Subhash Chandra Garg argued a “digital rupee will replace physical paper rupee as currency.” As the former executive director of the World Bank and former Indian finance secretary, Garg argued both that bitcoin is a global currency and that India should create a Central Bank Digital Currency (CBDC) that citizens can use with “digital wallets.”
Even beyond India, entrepreneurs like London-based Pavel Matveev of Wirex Ltd. are eager to expand in India.
“Last November we launched our product in eight countries across Southeast Asia, and we are hoping to launch in India this summer,” Matveev said in a phone interview. “The United Kingdom for example has a huge remittance flow from the UK to India. … [Indian demand for crypto] may be exhilarated by the COVID-19 situation.”
Read more: The Big Thing Holding Back India’s Crypto Boom
Beyond boosting exchanges and remittances, Matic Network co-founder Sandeep Nailwal said there’s been an uptick in the usage of decentralized applications (dapps). Within the first month of rolling out an Ethereum scaling solution, Nailwal said his startup garnered roughly 60 dapps and is currently in the process of onboarding another 60.
“Especially with crypto, people are able to play games and earn money out of it. Real money games are becoming more popular,” he said during a video call. “We’re seeing a lot of applications [rely on us] because Ethereum is completely choked up.”
Nailwal added that there are more tech workers in India, with more than 1 billion people, than the entire populations of some countries. Especially in tech hubs like Bangalore, there are plenty of technically skilled people willing to overcome the UX challenges that hinder “mainstream” users. So far at least 15 of the dapps using Matic also hail from India, Nailwal said.
This may be the summer of Ethereum in India.
India crypto revival
“You will start seeing a large number of Indian applications being used, proportionately,” Nailwal said about the rise of “India’s Silicon Valley,” Bangalore.
While government blockchain projects explore issues like food distribution, Nailwal said he is participating in a monthlong ETHIndia virtual hackathon, along with a few hundred developers. The ETHIndia Community Telegram group has roughly 931 members.
Plus, the Trump administration’s hostile approach to foreign worker visas may inspire some Indian workers to build their careers in India’s tech industry instead. As the global recession worsens, India is now home to millions of people with diaspora connections and the computer skills to use cryptocurrency.
Unocoin exchange co-founder Sunny Ray said, now that a few of the Indian industry’s major legal battles were won in court, exchanges are coming “back from the dead.”
Read more: Indian Police Seize ATM Run By Crypto Exchange Unocoin
“Banking is back, the company is profitable again in less than two months, we’re hiring people back,” Ray said about Unocoin reopening and serving “thousands” of active monthly users again. In total, the exchange has roughly 400,000 users that completed the know-your-customer process. Now Indian traders are barely getting started. The local market is slowly ramping up.
Unocoin co-founder Sathvik Vishwanath said the broader economic crisis has reduced expendable income and made Indians more conservative as unemployment spreads. According to the Centre for Monitoring Indian Economy, the unemployment rate last month was over 22%. Instead of pre-coiners flocking to crypto, Vishwanath expects this crisis could have a delayed impact of inspiring more crypto-novices and day traders that start treating crypto as an investment.
Tech-savvy users may increase their crypto holdings, Vishwanath said, because any Indian household with expendable wealth is now thinking about diversification.
Kashif Raza, a co-founder of the Indian news startup Crypto Kanoon, said, “people are finding crypto as an attractive proposition for hedging their risks, but still it is a long way [to go].” In the meantime, gold is often seen as the best way for Indian families to custody their own wealth. Indeed, the Indian gold market is booming and prices reached record highs in June.
Read more: Geopolitical Crisis May Benefit Oil, Gold and CBDCs, Not Bitcoin
“One thing is clear post-COVID-19, that in both [urban and rural communities] gold is a perfect hedge during the crisis. The gold price has risen exponentially,” Raza said in an email. “There are many exchanges that have observed a spike in new registrations on their platform during the lockdown in India.”
BTC and ETH surge
So far, Raza said, Indians staying indoors are online searching for “new avenues of investment,” then finding crypto after gold. Indeed, Ashish Singhal, the Bangalore-based CEO of both the crypto wallet CRUXPay and the exchange Coinswitch.co, said he’s up to a total of 25,000 users since the coronavirus crisis began. More than half of the Indian users are women, he said.
“The main cryptocurrencies are bitcoin and ether,” Singhal said during a call. “Exchanges like us need to do a big push to educate users. … A lot of people still believe cryptocurrency is banned in India.”
Women from India, who generally own gold jewelry as part of their wealth, are more likely to work in the tech industry than women from the United Kingdom or the United States. Across genders, Singhal said he’s seen a lot of enthusiasm, participation and “activities” around Ethereum.
“Ethereum has its limits, but it’s an open platform to experiment,” Singhal said. “India is a very important market. Everyone understands that. We just need regulations to protect users, which will spark innovation.”
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