Leading Crypto Exchanges Explore Ways to Start Businesses in India

Leading virtual currency exchanges are looking for ways to break into India, even as the fate of cryptocurrencies in the country hangs in the balance. The success of Binance has prompted many exchanges to try their luck in India’s nascent crypto sphere.

Meanwhile, reports indicate that the Indian central government is mulling over new legislation that could make cryptocurrencies illegal. Critics of the potential ban believe that it would prevent the digitally savvy young country of nearly 1.35 billion people from exploring its economic prospects. 

Crypto Exchanges are Scouting for Opportunities in India

According to four sources with knowledge of the matter, U.S.-based Kraken, Hong Kong-based Bitfinex, and rival KuCoin are actively engaged in discussions to advance their businesses in the Indian market. One source, who is working with an exchange to acquire an Indian firm, said, “These companies have already begun talks to understand the Indian market and the entry points better.”

The source added that two exchanges were already weighing their options, and trying to decide between whether to set up an Indian subsidiary or buy an existing firm, like Binance, the world’s largest crypto exchange. 

All three exchanges are ranked among the world’s top ten by price-tracking website Coinmarketcap.

The demand for cryptocurrencies is only increasing, with some suggesting that there are 15 million crypto investors in India, holding over 100 billion rupees ($1.37 billion) in virtual currency assets. Founder of digital bank Cashaa, Kumar Gaurav explains, “the Indian market is huge and it is only starting to grow if there was more policy certainty by now Indian consumers would have been spoilt for choice in terms of exchanges because everyone wants to be here.” 

The Future of Cryptocurrencies in India Remains Undecided

Currently, India has no laws that could prevent cryptocurrency exchanges from operating in the country. If an exchange wants to establish itself in India, it only needs to register itself as a tech company. But authorities are increasingly wary of crypto transactions, alleging that they could be used to bypass India’s strict exchange policies by criminals and wealthy people to hide money and destabilize the financial system.

Last month, China forbid its financial institutions and online payment companies from offering services related to cryptocurrency transactions. Now, India appears to be charting the same course. Earlier in March, the government was expected to introduce a bill that would make both the trade and possession of cryptocurrencies illegal. But the legislation was withheld, and several conflicting statements made in the aftermath left the markets puzzled.

In the meantime, prominent banks in the country have started to distance themselves from crypto exchanges, with the RBI citing concerns about the volatility of digital assets. The Reserve Bank is also planning to float its own digital currency, a project termed as “work in progress” by RBI governor Shaktikanta Das.

Amidst the chaos and confusion over the future of cryptocurrencies, some exchanges clearly believe that it’s better to gain a foothold in the market rather than missing out. Darshan Bathija, CEO of Vauld, an overseas exchange firm with a presence in India, says, “It’s clear that the rewards outweigh the perceived risks, which is luring these global firms to the Indian market.”