The Supreme Court’s decision overturning the Reserve Bank of India’s (RBI) ban on banks and financial institutions dealing with cryptocurrency-related businesses has come as a shot in the arm for India’s cryptocurrency start-ups.
According to industry experts and senior executives, the move is set to enable start-ups in the space to raise significantly more funding.
In fact, just days after the SC set aside the RBI’s order, two of the largest start-ups in the space — WazirX and Binance, which owns the former — announced a $50 million blockchain fund focused on investing in crypto start-ups in the country.
Officials in the two companies have said that this is a move focused towards expediting the growth of the ecosystem and provide it with more capital since the ban has left them “two years behind” their global peers.
“During the early stage, one of the major challenges for blockchain start-ups in India includes raising funds and scaling their platforms. Through, Blockchain for India fund, we aim to provide easy access to funding and mentoring to start-ups,” said Binance CEO and founder, Changpeng Zhao.
The new fund aims to make investments in equity and cryptocurrency tokens ranging from $100,000 to $5 million across the segment, from companies dealing with fiat-to-digital assets gateway solutions, trading platforms, payment and remittance solutions to those operating digital asset wallets, stablecoins, DeFi platforms, decentralised applications and more.
However, Nischal Shetty, founder of WazirX, says that the fund is “flexible with the holding period”. “This is not about getting an instant exit. We are also open to acquiring start-ups and plan to provide support to universities and student organisations who want to set up blockchain tech incubators at their college to accelerate blockchain education in India,” Shetty added.
The Binance-WazirX fund is not the only entity looking to ramp up investments in the Indian cryptocurrency segment. Just last week, another Indian cryptocurrency exchange, CoinDCX, announced that it would be allocating $1.3 million toward increasing awareness about the segment and enable easier adoption.
“Only 5 million people in India currently hold cryptocurrencies — less than 0.5 per cent of the population. But by educating consumers and combating negative preconceptions of the industry, we can boost the number from 5 million to 50 million,” said Sumit Gupta, co-founder and CEO, CoinDCX.