CoinSwitch, India’s top crypto app, calls for ‘peace and certainty’ on regulation

Souvenir tokens representing the Bitcoin cryptocurrency dive into water in this illustration taken May 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

DAVOS, Switzerland, May 22 (Reuters) – India must establish cryptocurrency rules to resolve regulatory uncertainty, protect investors and boost its crypto sector, CoinSwitch CEO Ashish Singhal said on Sunday. .

Although India’s central bank supported banning cryptocurrencies due to financial stability risks, a move by the federal government to tax their income was interpreted by the industry as a sign of acceptance by New Delhi. .

“Users don’t know what will happen to their holdings – will the government ban, not ban, how will this be regulated?” said Singhal, a former Amazon engineer who co-founded CoinSwitch, to Reuters at the World Economic Forum in Davos.

CoinSwitch, which is valued at $1.9 billion, claims it is the largest crypto company in India with over 18 million users. The company, based in India’s main technology hub of Bengaluru, is backed by Andreessen Horowitz, Tiger Global and Coinbase Ventures.

“Regulation will bring peace…more certainty,” he added.

Blockchain and cryptocurrency companies have a strong presence at this year’s Davos meeting, which coincides with a period of falling crypto prices around the world.

India’s central bank has expressed “serious concerns” about private cryptocurrencies, but Prime Minister Narendra Modi said in December that these emerging technologies should be used to strengthen democracy, not undermine it. Read more

Exchanges in India often struggle to partner with banks to allow funds to be transferred and in April CoinSwitch and others disabled rupee deposits through a widely used state-backed network, alarming investors. Read more

‘CLARITY’

While changes in taxation and some advertising regulations have brought some relief, more needs to be done, Singhal said, adding that India should come up with a set of laws.

These should include standards for identity verification and transfer of crypto assets, while for exchanges, India should put in place a mechanism for them to track transactions and report them to any authority if necessary. .

Although no official data is available on the size of the Indian crypto market, CoinSwitch estimates the number of investors at 20 million, with total holdings of around $6 billion.

Regulatory uncertainty was widely felt. In April, Coinbase, the largest cryptocurrency exchange in the United States, launched in India, but within days it suspended the use of a state-backed interbank funds transfer service.

Coinbase CEO Brian Armstrong said later in May that the move was triggered due to “informal pressure” from India’s central bank.

CoinSwitch also suspended so-called UPI transfers to talk to banking partners and make them feel comfortable, Singhal said in the interview. He added that CoinSwitch was in talks with regulators to try to restart the transfer service.

“We are pushing for regulation. With the right regulation, we can get clarity,” he said.

Reporting by Aditya Kalra in Davos; Editing by Alexander Smith

Our standards: The Thomson Reuters Trust Principles.