Tag: cryptocurrency

Report, BFSI News, ET BFSI

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NEW DELHI: Indians are outpacing the rest of the world when it comes to cryptocurrency adoption even as investors are still awaiting the official verdict on cryptocurrency exchanges in the country.

A study conducted by the portal BrokerChoose’s annual crypto proliferation index reveals that at over 10 crore, India has the largest number of crypto owners in the world followed by the US and Russia.

As a percentage of the population, India has the fifth-highest rate of crypto owners at 7.3%. This index is topped by Ukraine at 12.73% of the population, followed by Russia at 11.91%, Kenya at 8.52% and the US at 8.31%.

The study also evaluated internet searches in various countries to assess the interest in cryptocurrencies.

In the past twelve months, India had the second-highest number (nearly 36 lakh) of total crypto searches, while the US saw the highest number of crypto searches at 69 lakh.

In fact, India ranked second out of 154 countries on the 2021 Global Crypto Adoption Index by Chainalysis in August this year.

India’s market grew 641% over the past year, the report showed, using a metric that estimates the total cryptocurrency received by a country.

“Large institutional-sized transfers above $10 million worth of cryptocurrency represent 42 per cent of transactions sent from India-based addresses,” said the report, adding that the numbers suggest that India’s cryptocurrency investors are part of larger, more sophisticated organisations.

Point to note: The world’s biggest cryptocurrency, bitcoin, has already gained more than 50% since the start of the year. The one-year gain stands at around 400%, which is promoting more and more Indians to opt for crypto exchanges.

A survey conducted by consulting firm Kantar shows that 19% of urban Indians intend to invest in virtual tokens in the next six months. And when it comes to crypto ownership, Bitcoin rules the roost with a preference of 75 per cent, followed by Ethereum at 40 percent, Binance coin at 23 per cent, and XRP at 18 per cent.

One major attraction is the chance to earn high profits by investing in small amounts. WazirX allows investments into bitcoin with as little as Rs100-500.

Indians who own cryptocurrency are mostly in the age bracket of 21 to 35 and live in metro cities. The owners have a “higher risk appetite”, the survey said, as they are preferring crypto, mutual fund over the fixed deposits and life insurance.

So a spurt in the popularity of crypto exchanges and platforms in recent months like CoinSwitch Kuber (CSK), WazirX, CoinDCX, ZebPay, Unocoin and BuyUcoin etc is not surprising.

Crypto exchange Zerodha has over seven million users against 11 million at CoinSwitch Kuber. There are 8.3 million at WazirX.

Unocoin has even launched deposits via UPI wallets in the Indian currency for a faster top-up to buy and sell Bitcoins and other cryptocurrencies on the platform despite the uncertainty among the prospective users regarding the usage of cryptocurrency in comparison to real money.

Last week, CoinSwitch Kuber raised over $260 million in Series C funding round from a clutch of investors, valuing the company at $1.9 billion.

A survey conducted by consulting firm Kantar shows that 19% of urban Indians intend to invest in virtual tokens in the next six months. And when it comes to crypto ownership, Bitcoin rules the roost with a preference of 75 per cent, followed by Ethereum at 40 per cent, Binance coin at 23 per cent, and XRP at 18 per cent.

Indian start-ups in the crypto space have received 73% more funding in the first six months of calendar 2021 compared to the whole of 2020, shows data from Tracxn. Another NASSCOM report titled ‘Crypto Industry in India’, said that more than 60% of states in India are emerging as crypto tech adopters, with the industry set to reach 241 million dollars by 2030 in India.

But cryptocurrencies are yet to be accepted as legal tender and lack legal framework and regulatory norms in the country.

The ball is currently in the court of the finance ministry and the Reserve Bank of India (RBI).

A cryptocurrency bill is expected in the winter session. The finance ministry has also reportedly formed a new committee to find out if income made by crypto-trading could be taxed.
Meanwhile, RBI is also looking to launch its first official digital currency as a regulated “central bank digital currency (CBDC)” by the end of 2021. Much of the scepticism stems from the fact that a worldwide boom in cryptocurrency has bred the ground for fake trading platforms.

But with larger investors warming to crypto and other digital assets, the total amount of funding for global blockchain companies hit a record $6.586 billion in the September quarter, almost double of that raised in 2020, according to market intelligence platform Blockdata.

On Monday, cryptocurrency analytics firm Elliptic raised $60 million from investors including SoftBank and Wells Fargo Strategic Capital.

The company tracks the movement of cryptocurrencies on blockchain to help financial crime compliance.

Earlier in May, a Brazilian money management firm focused on cryptocurrencies raised about $26 million from investors including SoftBank Group Corp and in July the SoftBank Latin America fund invested $200 million in the Series B funding of 2TM Group, the digital asset group that owns cryptocurrency exchange Mercado Bitcoin.



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Indian investors in the dark as cryptocurrency ads gather steam, BFSI News, ET BFSI

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New Delhi, “Kya aapke portfolio mein crypto hai?” If you have read such advertising lines recently — and now watching crypto ads as you surf through IPL 2021, YouTube and various social media platforms — make sure you hold on to your hard-earned money for a while.

Indian crypto players are bombarding people with advertisements across platforms — doubling down on their marketing spend when the cryptocurrencies are yet to be accepted as legal tender and lack legal framework and regulatory norms in the country.

The ball is currently in the court of the Finance Ministry and the Reserve Bank of India (RBI). A cryptocurrency bill is expected in the winter session and till the whole picture is cleared, investing in cryptocurrencies can be a dangerous move, warn legal experts.

“Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks,” is a thin line at the end of the advertisements, not visible to many people who have started investing via various crypto exchanges.

According to Dr. Pavan Duggal, a seasoned Supreme Court advocate and a cyber law expert, few players are asking Indian investors to invest in cryptocurrencies, primarily because there is a big legal vacuum that exists in the country.

“India has still not made up its mind as to how it wants to deal with cryptocurrencies. These are not legal tender in India. As per the judgment of the Supreme Court of India, the Reserve Bank of India is the nodal statutory authority to deal with all aspects pertaining to cryptocurrencies. However, more work needs to be done in this area,” Duggal told IANS.

If we look at cryptocurrencies as mere electronic records, they could be brought under the ambit of legality under Section 4 of the Information Technology Act, 2000. However, there is a lack of appropriate capacity building and awareness among the Indian investors about legal capabilities and nuances of cryptocurrencies.

“The government cannot be a mute spectator while open calls are being made asking Indian investors to invest into cryptocurrencies. Without appropriate homework on the legalities of cryptocurrencies in India, merely prohibiting players from asking Indian investors to invest crypto currencies would also not work,” Duggal elaborated.

India has seen a spurt in the popularity of crypto exchanges and platforms in recent months like CoinSwitch Kuber (CSK), WazirX, CoinDCX, ZebPay, Unocoin and BuyUcoin etc.

Within 15 months of commencing operations in India, CoinSwitch Kuber is India’s largest crypto exchange with more than 10 million users. Of the total 10 million users, 7 million are active users on the platform with a monthly transaction volume of Rs 15,138 crore.

Homegrown crypto exchange Unocoin has launched deposits via UPI wallets in the Indian currency for a faster top-up to buy and sell Bitcoins and other cryptocurrencies on the platform.

“There is still uncertainty among the prospective users regarding the usage of cryptocurrency in comparison to real money. We want all our users to have the ease of trading or exchanging on our platform,” said Sathvik Vishwanath, CEO and Co-Founder, Unocoin.

According to a report by IT industry’s apex body Nasscom, there are 15 million retail investors in India investing in the cryptotech space.

New Delhi-based cyberlaw expert Virag Gupta said that several emerging sectors within the digital economy do not have an established legal framework and regulatory network.

“Cryptocurrency is a unique area, since it attracts concurrent regulation by the Ministries of Law, Finance and Commerce; alongside the RBI and the SEBI. Nonetheless, certain regulatory needs may be addressed using the IT Act and taxation may be enabled through a notification by the Ministry of Finance,” Gupta told IANS.

A legal endorsement by the RBI and legislation passed by the Parliament may further pave the way for lawful trading.

“It is a misconception to believe that a conducive regulatory environment will harm the crypto currency sector. Rather, to cement a certain future, detailed jurisprudence diving deep within the currency and technology essential to the sector must be designed,” Gupta suggested.

Otherwise, the entire sector may be susceptible to uncertain government intervention “such as measures employed by the Chinese government which have led to loss of trust, investments, and overall destruction of the market”.

China’s central bank announced last month that all transactions of cryptocurrencies are illegal, effectively banning digital tokens such as Bitcoin, Ethereum and Solana etc.

When Bitcoin crossed $50,000 again last week, Shivam Thakral, CEO, BuyUcoin, said there has been a paradigm shift in the investment patterns across the globe which is underlined by the data shared by crypto exchanges from time to time.

“India’s middle-class population is willing to explore digital assets for creating long-term wealth to fulfil their goals, which may not be possible through any other asset class,” Thakral said.

However, it is possible that the gullible Indian investors would invest in crypto currencies, only to find that their business interests have been prejudicially impacted.

“This is a golden opportunity for the Indian government to explore mechanisms of how it can ride the tide of crypto-currencies and also draft enabling legal frameworks to regulate crypto-currencies,” said Duggal.

To cement a certain future, “detailed jurisprudence diving deep within the currency and technology essential to the sector must be designed,” Gupta added.

(Nishant Arora can be reached at nishant.a@ians.in)

–IANS

na/pgh



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Cryptocurrencies rebound 10-fold since last yr, despite tough steps from China, India, BFSI News, ET BFSI

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Cryptocurrencies have rebounded with a total market value of $2.2 trillion in late September, despite tough restrictions imposed by countries like China and India, according to report by DBS Group Research.

This is a ten-fold increase since the beginning of last year. The launch of several digital asset exchanges, rollout of innovative wallets, changes in mining technology and wide issuance of stablecoins have kept the momentum strong for crypto, the report said.

Also read: China announces cryptocurrency bank – what does it mean for India?

Countries like India and China are keeping a close eye on crypto assets, as the scale and scope of this asset class are large enough to have systemic implications, it said.

Multiple reasons for the ban have been cited by the governments, such as security and governance, consumer protection, surveillance gap and monetary policy efficacy.

Also read: What are stablecoins, and how stable are they?

China’s central bank, in the last week of September, declared all transactions involving Bitcoin and other virtual currencies illegal, stepping up a campaign to block use of unofficial digital money. This was the second time the government announced a ban on crypto.

In March, it was reported that India would propose a law banning cryptocurrencies, fining anyone trading in the country or even holding such digital assets. This, again, is not the first time when India is declaring its inhibition towards adopting crypto.

The resilience of crypto assets after the ban suggests that the market impact of China’s opposition to crypto could be declining. Year-to-date, Ether is outperforming Bitcoin by 400% in price return terms.

The ban has also led miners to migrate their businesses to crypto-friendly locations, which can offer cheap, reliable and greener sources of electricity, the report said.

Kazakhstan, US and Russia are some of the preferred locations.

According to experts, China’s ban was likely because the government wants to remove competition for its digital yuan. Adding to this, India’s Reserve Bank of India has also said that it was eyeing a phased implementation of its central bank digital currency (CBDC).

Also read: RBI eyes phased implementation of CBDC, will work in unison with payment infra, says RBI’s Ranjan

CBDC adoption will help drive future usefulness, acceptance by merchants and improve cross-border payments, according to banking regulators.

However, there is still a lot of time for countries to roll out their CBDCs. To maintain stability, CBDCs would need to have a careful design and implementation, the report said.



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US Bank introduces cryptocurrency custody services, BFSI News, ET BFSI

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US Bancorp, the fifth largest banking institution in the US, announced in a press release on October 5 that its subsidiary US bank is launching cryptocurrency custody services that will be available for global service fund and service clients.

The first sub-custodian for supporting the new services of the bank will be New York Digital Investment Group (NYDIG).

NYDIG is a leading technology and financial services company and an arm of Stone Ridge Asset Management, dedicated to Bitcoin. Other cryptocurrencies like Ethereum will be soon added in the new services.

The new offering was launched to meet the growing demand and interests of the institutional investors and fund service clients in cryptocurrency, CNBC quoted Gunjan Kedia, Vice Chairman of US Bank’s wealth management and investment services division.

Even the legal sanctions and extreme volatility of Bitcoin did not deter big investors from continually investing in cryptocurrencies.

The new custody services will benefit the institutional investors in the following ways:

* The service will help investment managers store private keys for bitcoin, bitcoin cash and litecoin with the help of sub-custodian NYDIG.

* The services would provide the institutional investment managers having private funds in the US or Cayman Islands, safe storage solutions for bitcoins. Additional coin support would be added over time.

US Bancorp, the parent company of US bank has currently $559 billion worth of assets and serves national and global customers. US Bank established its Blockchain and Cryptocurrency Practice in 2015.

The bank had announced the launch of three cryptocurrency offerings in April itself to address the ever expanding investment needs of the clients.

* The first service was the custody service which is live now.

* The second service is regarding investment in Securrency, a developer of institutional-grade blockchain-based financial and regulatory technology.

* The third service that allows the US Bank to administer NYDIG’s Bitcoin Exchange Traded Funds (ETFs) in 2021 awaits regulatory approvals.



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CoinSwitch Kuber raises $260 million in Series C funding, becomes unicorn, BFSI News, ET BFSI

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CoinSwitch Kuber, a crypto asset platform, has raised $260 million in its Series C funding round. This investment has made the platform a unicorn, with a valuation of $1.9 billion.

Andreessen Horowitz (a16z), Coinbase Ventures and existing investors Paradigm, Ribbit Capital, Sequoia Capital India and Tiger Global, were among the key investors, the company said in a release.

“I believe, simplifying crypto investments for the Indian youth has helped us to stand out… We are humbled by the trust shown in CoinSwitch Kuber by two of the biggest names in the global crypto investment arena with Andreessen Horowitz choosing us to be their first investment in India. Coinbase Ventures’ investment is also testimony to the confidence they have in CoinSwitch Kuber’s business model and the tremendous potential India’s crypto space has to offer,” said Ashish Singhal, co-founder and CEO, CoinSwitch Kuber.

The crypto platform will onboard 50 million Indiansm introduce new products, hire for leadership roles, add new asset classes, onboard instituitional clients, launch an ecosystem fund and build crypto awareness and education with the funds that have been raised.

Started in 2017 by Ashish Singhal, Govind Soni, and Vimal Sagar, CoinSwitch was launched as a global aggregator of crypto exchanges. The company launched its India operations in June 2020.



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Stablecoins to face same safeguards as traditional payments, BFSI News, ET BFSI

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By Huw Jones

LONDON – Stablecoins would have to comply with the same safeguards as their more traditional competitors in payments under proposals from regulators on Wednesday as authorities get to grips with a rapidly evolving sector.

Stablecoins are cryptocurrencies designed to have a stable value relative to traditional currencies, or to a commodity such as gold, to avoid the volatility that makes bitcoin and other digital tokens impractical for most commerce.

Facebook Inc’s move in 2019 to introduce its own stablecoin Diem, then known as Libra, raised concerns among governments and central banks that a major payments competitor could emerge overnight with little regulation.

Since then, Diem has radically scaled back its ambitions and plans to launch a U.S. dollar stablecoin.

The IOSCO group of securities regulators and the Bank for International Settlements, a global forum for central banks, set out on Wednesday how current rules for major clearing, settlement and payments services should also be applied to ‘systemic’ or heavily used stablecoins.

The proposals, put out to public consultation before being finalised early next year, put into practice what regulators have long called for: the same rules for the same type of business and accompanying risks.

The rules mean a stablecoin operator must set up a legal entity which spells out how it is governed and manages operational risks like cyber attacks.

Though still little-used for commerce, the use of stablecoins in crypto trading has grown rapidly as retail and larger investors warmed to the emerging asset class during the COVID-19 pandemic.

Tether, the largest stablecoin, has a market capitalisation of around $68 billion versus just $15 billion a year ago. The value of circulating USD Coin, another major stablecoin, has also jumped dramatically to over $30 billion from just $2.7 billion a year ago, according to CoinMarketCap.

Countries that allow stablecoins to operate would be required to apply the principles as part of their affiliation to IOSCO and the BIS.

“This report marks significant progress in understanding the implications of stablecoin arrangements for the financial system and providing clear and practical guidance on the standards they need to meet to maintain its integrity,” IOSCO Chair Ashley Alder said in a statement.

The proposals do not cover issues specific to stablecoins pegged to a basket of fiat currencies, which are being considered separately.

(Additional reporting by Tom Wilson, editing by Giles Elgood)



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Cryptocurrencies post inflows for 7 straight weeks, led by bitcoin

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By Gertrude Chavez-Dreyfuss

NEW YORK – Cryptocurrency investment products and funds recorded inflows for a seventh straight week, as institutional investors warmed to more supportive statements from regulators, data from digital asset manager CoinShares showed on Monday.

Inflows to the sector were $90.2 million last week, led by bitcoin which snagged $69 million, according to CoinShares data as of Oct. 1. Over the past seven weeks, crypto inflows reached $390 million. For 2021, inflows totaled $6.1 billion.

Bitcoin recorded its third straight week of inflows.

“We believe this decisive turnaround in sentiment is due to growing confidence in the asset class amongst investors and more accommodative statements from the U.S. Securities Exchange Commission and the Federal Reserve,” wrote James Butterfill, investment strategist, at CoinShares.

SEC Chairman Gary Gensler last week at a Financial Times conference reiterated his support for bitcoin exchange traded funds that would invest in futures contracts instead of the digital currency itself.

A day later, Fed Chair Jerome Powell, in remarks before Congress, said the Fed had no intention of banning cryptocurrencies.

Bitcoin on Monday hit a four-week high of just under $50,000 and was last up 2.3% at $49,333.

Blockchain data provider Glassnode, in its latest research note on Monday, pointed out that as bitcoin rallied out of its narrow trading range last week, approximately 10.3% of the circulating supply returned to an unrealized profit.

Ethereum products and funds, meanwhile, posted another week of inflows totalling $20 million, despite conceding market share to bitcoin in recent weeks. Inflows to ether, the token for the Ethereum blockchain, so far this year amount to $1 billion.

Ether was last down 0.4% at $3,403.

Still, despite consecutive weekly inflows across crypto products, volumes were low at $2.4 billion last week, CoinShares data showed, compared to $8.4 billion in May 2021.

Assets under management at Grayscale and Coinshares, the two largest digital asset managers, climbed last week to $41.1 billion and $4.6 billion, respectively.

(Reporting by Gertrude Chavez-Dreyfuss; editing by Richard Pullin)



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CoinDCX brings in Amitabh Bachchan as brand ambassador

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Cryptocurrency exchange CoinDCX has brought onboard actor Amitabh Bachchan as its first-ever brand ambassador.

“Through this collaboration, CoinDCX wants to increase awareness around crypto and popularise crypto as an emerging asset class,” it said in a statement on Monday, adding that Bachchan will be the face of the new campaign, which will focus on popularising crypto as an asset class.

Significantly, Bachchan is well versed with the crypto sector as he too is a crypto investor and has launched his own non fungible token recently.

Also read: Making crypto a common currency

“Through Bachchan, CoinDCX wants to convey that it is at the forefront when it comes to the safety of its users and being compliant with all the regulations. In addition, the brand aims to educate prospective users about the crypto space,” it further said.

According to CoinDCX, the crypto market in India is worth more than $2 trillion and is set to increase further with more Indian investors showing interest in it.

“Bachchan’s knowledge will prove valuable in building trust and credibility amongst new users. We are certain that his association with CoinDCX will help bring greater visibility to the world of crypto and develop a strong brand recall for us,” said Sumit Gupta, Co-Founder and CEO – CoinDCX.

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5 best and worst performers, BFSI News, ET BFSI

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The crypto market has been correcting since the last few months and now all eyes are on what Bitcoin is going to do next. $40,000 was Bitcoin’s strongest local support, and last week we saw a positive move from $40,000 to $48,000.
Considering $50,000 as Bitcoin’s first local resistance, this move can be seen as a test move. Major resistance is not very far, and north of $52,000 is all it needs to break into a new trend.

This volatility in the market is good because it brings in some action; at the same time, support and resistance are tested multiple times.

Usually we see such behaviour towards the beginning of any big move. This is the time where short-term traders stay away and long time traders monitor the market closely for confirmation.

From a crypto market point of view, the current phase looks like a good consolidation period and hopefully, we’re coming to the end of consolidation.

As for the next movement, it’s going to be very difficult to say. It’s because when the stock market is also correcting from an all-time high and if there is a significant correction in the stock market, we could see that effect in the crypto market as well.

This would probably decide the next big move for Bitcoin and altcoins. However, it is time for traders to be patient. In the short-term, we could also see a few short positions being open.

However, from a risk-reward perspective, it does not seem to be a favourable time to trade. If you are a long-term investor, it’s definitely a good idea to dollar-cost-average your investments and keep buying the dip.

The month of October should be interesting for the market. Stay safe and play safe.

Crypto Cart: Five best performers
OMG Network (OMG)- 107% up
Axie Infinity (AXS)- 72.5% up
OKB (OKB)- 57.7% up
Qtum (QTUM- 53.8% up
ICON (ICX)- 49.9% up

Crypto Cart: Five worst performers
Constellation (DAG): 29.5% down
Celer Network (CELR): 17% down
Velas (VLX): 15.6% down
DigitalBits (XDB): 15.5% down
IoTex (IOTX): 7% down

(Source: coinmarketcap.com, data as of 13.30 hours, IST on October 02, 2021)
(Siddharth Menon is COO, WazirX. Views are his own)



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Kamath, BFSI News, ET BFSI

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As the cryptocurrency craze keeps on growing around the world, Nikhil Kamath, Co-founder of Zerodha and True Beacon, has a piece of advice for the crypto-crazy millennials: it’s okay to diversify your portfolio, but don’t put in anything beyond 1-5 per cent of your net worth in it.

A battle between the central banks and private cryptocurrencies has been brewing for some time and now it seems we are getting closer to a climax,” said Kamath, the co-founder of India’s largest stock trading platform by volume.

“Developments in China and some of the other parts of the world show that to some extent, cryptos do take away powers from central banks and governments. So they are bound to fight back,.and when they come out and try to regulate it and change it in one way or another, it will be interesting to see what happens and which side wins,” he said.

The 35-year-old fintech disruptor says he would put his money on the side of central banks and the governments not allowing cryptos to thrive beyond a certain extent.

Kamath says one should not have too much allocation to any one asset class, and crypto is a fairly volatile asset class. “If one is looking to diversify one’s portfolio, then it’s okay to invest 1-2-5 per cent of one’s net worth in cryptos. But do so only after understanding what it entails,” he said.

On Wednesday, the global crypto market cap stood at $1.89 trillion, down 3.65 per cent from the previous day, amid choppy trading. The total crypto market volume over the last 24 hours stood at $97.32 billion, down 14.64 per cent.

Beijing last Friday issued a blanket ban on all crypto trading and mining and cryptocurrency exchanges and providers of crypto services are since scrambling to sever business ties with mainland Chinese clients. Ten powerful Chinese government bodies, including the central bank, said overseas exchanges are barred from providing services to mainland investors via the internet — a previously grey area -z and vowed to jointly root out “illegal” cryptocurrency activities.



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