Global cryptocurrency exchanges looking to enter Indian markets

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Despite the regulatory conundrum over virtual currencies in India, global cryptocurrency exchanges are exploring ways to enter into Indian markets, according to Reuters. The foreign exchanges may follow the footprints of Binance that acquired WazirX in November 2019.

According to Reuters U.S.-based Kraken, Hong Kong-based Bitfinex and KuCoin are actively looking for ways to enter into the Indian market. “These companies have already begun talks to understand the Indian market and the entry points better,” one source was quoted as saying in the report. The other two exchanges, he said, were in the initial stages of deciding whether to enter India and weighing their options, which effectively come down to a choice between setting up a subsidiary or buying an Indian firm.

According to CoinMarketCap, they rank among the world’s top ten exchanges based on their traffic, liquidity and trustworthiness of their reported trading volumes.

Pending Cryptocurrency Bill

In February this year the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021  was listed in Parliament. Though the initial signal was about a complete ban on cryptocurrencies recently Finance Minister Nirmala Sitharaman said there won’t be a complete ban. She also said RBI will be taking a call on the regulation part. While FM’s statement was considered a positive sign by crypto exchanges, that RBI seems to be seeking a complete ban on virtual currencies.

In its last Monetary Policy Review in June RBI Governor Shaktikanta Das made it clear that the central bank’s view on cryptocurrencies like Bitcoin remains unchanged and it continues to have “major concerns” on the volatile instruments. “There is no change in RBI’s position (on cryptocurrencies). Our circular clarifies the position very well,” Das told reporters in the customary post-policy press conference when asked if there has been a change in its view.

The RBI had first come out with a circular on the issue in 2018, cautioning people about investing in cryptocurrencies, which do not have any sovereign character. It had barred entities regulated by it from dealing in such instruments. However, the Supreme Court in early 2020 struck down the circular.

(With inputs from PTI)