India's top crypto app CoinSwitch calls for regulatory 'peace, certainty'
By Aditya Kalra
DAVOS, Switzerland, May 22 (Reuters) - India must establish rules on cryptocurrencies to resolve regulatory uncertainty, protect investors and boost its crypto sector, CoinSwitch CEO Ashish Singhal said on Sunday.
Although India's central bank has backed a ban on cryptocurrencies over risks to financial stability, a federal government move to tax income from them has been interpreted by the industry as a sign of acceptance by New Delhi.
"Users don't know what will happen with their holdings - is government going to ban, not ban, how is it going to be regulated?," Singhal, a former Amazon engineer who co-founded CoinSwitch, told Reuters at the World Economic Forum in Davos.
CoinSwitch, which is valued at $1.9 billion, says it is the largest crypto company in India with more than 18 million users. The firm, based in India's main tech hub of Bengaluru, is backed by Andreessen Horowitz, Tiger Global and Coinbase Ventures.
"Regulations will bring peace ... more certainty," he added.
Blockchain and cryptocurrency companies have a large presence at this year's Davos meeting, which coincides with a period of crypto prices plummeting around the world.
India's central bank has voiced "serious concerns" around private cryptocurrencies, but Prime Minister Narendra Modi in December said such emerging technologies should be used to empower democracy, not undermine it.
Exchanges often struggle in India to partner with banks to allow transfer of funds and in April, CoinSwitch and some others disabled rupee deposits through a widely-used state-backed network, alarming investors.
While moves on taxation and certain advertising regulation had brought some relief, a lot more needed to be done, Singhal said, adding that India should develop a set of laws.
These should include norms for identity verification and transferring crypto assets, while for exchanges, India should put in place a mechanism for them to track transactions and report them to any authority if need be.
While no official data is available on the size of India's crypto market, CoinSwitch estimates the number of investors at up to 20 million, with total holdings of about $6 billion.
Regulatory uncertainty has been widely felt. In April, Coinbase, the largest cryptocurrency exchange in the United States, launched in India, but within days paused use of a state-backed inter-bank fund transfer service.
Coinbase CEO Brian Armstrong later said in May the move was triggered due to "informal pressure" from India's central bank.
CoinSwitch too has paused so-called UPI transfers to hold talks with banking partners and make them comfortable, Singhal said in the interview. He added CoinSwitch was is in talks with regulators to try and restart the transfer service.
"We are pushing for regulations. With the right regulation, we can get the clarity," he said.
Reporting by Aditya Kalra in Davos; Editing by Alexander Smith
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.