Despite government apathy, investment in India's crypto industry continues.
Welcome to The Daily Forkast. April 25th, 2022.
I'm Justin Solomon of Forkast covering all things blockchain.
Indian Crypto Exchange CoinDCX raised US$135 million in its latest funding round, and in
an exclusive interview they gave us the lowdown on plans for the future and their outlook
for the industry in the country.
We'll take a look at that, plus a whole lot more coming up.
Now let's get you up to speed from Asia to the world.
Join thousands of NFT traders who already start their day on CryptoSlam.
First up, a denial from the world's largest crypto exchange.
Binance says a report from Reuters claiming that it is sharing client data with Russian
authorities is not true.
In a statement, Binance said suggestions that it shared any user data, including that of
Russian opposition leader Alexei Navalny with Russia's federal security services are categorically
false.
The statement came after Reuters reported that Binance Head of Russia, Gleb Kostarev,
met with a Russian intelligence unit last April and later consented to the agency's
request to share client data.
In a Facebook post, Kostarev also denied the allegations, calling it an absolute lie.
Binance said it will be writing a formal complaint to Reuters under the publication's editorial
code.
As of Monday morning in Asia, Reuters had not issued any response on the matter.
The exchange has made adjustments to its services in Russia based on the sanctions against the
country after its invasion of Ukraine.
The most recent is limiting services for Russians or users residing in Russia with crypto assets
of over US$11,000 to withdraw-only mode.
And speaking of the war in Ukraine, why not sign up for Forkast.News to join our discussion
"How the crisis will shape the age of crypto and decentralization?"
That's on May 12.
Over in China, authorities are pushing ahead with plans to showcase the digital yuan at
September's Asian Games.
Despite a high possibility of a delay, host city Hangzhou has made showing off the central
bank's digital currency or CBDC, a priority in the run up to the games.
Hangzhou is just 60 miles away from Shanghai, where mass lockdowns are in place amid the
city's biggest wave of COVID cases since 2020.
However, organizers say the venues are already ready, and officials say they will follow
the successful experiences of the Beijing Winter Olympics in publishing a plan to deal
with the COVID situation.
In the meantime, a large scale public test for the E-CNY has been planned, despite Hangzhou
not launching any giveaways of the digital yuan in lucky red packets to stoke public
demand, as has been seen in other test cities.
You can find those stories and more at Forkast.News.
Staying on that theme with more and more countries like China looking into launching a CBDC,
we asked Paolo Ardoino of crypto exchange Bitfinex what they mean for the future of
Stablecoins like tether or USDC.
Forkast Carolyne Wright reports.
Stablecoins are tokens backed by real world assets like the US dollar and they have proven
hugely popular as an onramp for investors looking for alternatives to traditional financial
products, as volatility in their price is low compared to the wider crypto market.
But with many central banks like the People's Bank of China making plans to issue CBDCs,
are stablecoins facing a threat to their existence?
Arduino doesn't think so.
One big misconception, I think, is that stablecoins - privately issued stablecoins like USDT and
CBDCs cannot coexist.
I believe that they can easily coexist because it's it's a bit naive thinking that the Central
European Bank will issue their they're CBDCs.
So they are stablecoin on Solana or on Ethereum.
They will not.
So CBDCs are a way for me to modernize the really old, expensive, slow banking system.
Ardoino explains that CBDCs will massively reduce costs for banks, as well as allowing
for much more efficient processing of transactions.
But despite all these plans for CBDCs in some emerging markets like Turkey, Venezuela or
Brazil, where the national currency is devaluing quickly, Stablecoins are seeing huge growth
as they are being used to provide financial protection.
They are putting their savings in Tether because they feel like is is their only protection
against the their national currency.
And of course, they could they put a portion also in general cryptocurrencies, but they
also don't want to suffer too much volatility for them is already a big win if they can
protect themselves from the devaluation of the national currency.
And while crypto enthusiasts may think nearly everyone already owns one token or another,
Ardoino points out that the vast majority of people in the world don't understand what
crypto is and are scared of getting on board.
He says that whether we're talking about blockchain technology generally a CBDC or a stablecoin,
privacy and ease of use are key to mass adoption.
Normal people need to use tools that are effective for day to day life that can be helpful.
They need to bring their children to school.
They need to bring they need to buy groceries and so on.
So it's all about bringing crypto to to their life in the most seamless way.
For Forkast, I'm Carolyn Wright.
Over in India.
CoinDCX's US$135 million Series D fundraising has made it the most highly valued exchange
in the South Asian country.
Speaking with Forkast Pradipta Mukherjee, co-founder Sumit Gupta explained what that
means for both CoinDCX and for India.
The much criticized new crypto tax law took effect in India this month, and one cryptocurrency
exchange in the country is weathering the storm.
Having raised US$135 million in its series D funding round, Sumit Gupta, the exchange's
co-founder, told Forkast about CoinDCX's plans for the future.
A lot of effort will go into building a very strong team all the way from engineering,
product compliance, business supply and marketing across the world.
So yes, I think we'll be able to accelerate our mission to make web accessible to masses.
Gupta says CoinDCX is now looking to grow its 400 strong workforce to cross the 1,000
mark by the end of this year.
The company has also mapped its plan for addressing the uncertainty of India's stand on crypto.
We're already the most compliant platform in the country.
We even though regulations are not there in the space.
We are self regulated and we follow all the norms.
In terms of AML, KYC, we have a very stringent KYC process and we make sure that we follow
whatever compliance practices that are traditional fintech business follows in the absence of
regulations and will continue to double down on that, invest a lot more in that area.
India imposed a 30% tax on all gains made from cryptocurrencies on April 1st, while
a 1% tax deducted at source on all transactions starts July 1st.
However, Gupta shared that CoinDCX has not seen a major dip in business since the law
took effect.
And although this might not be a popular sentiment, he thinks positively of this development.
We have seen significant improvement in terms of the understanding within the government.
Now there are tax laws and I think two years back we're talking about ban.
Now we things that have defined media, what is a virtual digital asset?
So if you just extrapolate it, I think the way forward is quite, quite promising and
I believe that India will regulate crypto.
Of course, it's not an easy thing to do.
It will take it some time and there are a lot of work that needs to be done in terms
of coming up with the right policies and frameworks that suits us for the Indian needs, and a
lot of global cooperation is also required.
So will the high taxation rates kill crypto in the country?
Gupta doesn't think so.
For Forkast, I am Pradipta Mukherjee, Kolkata, India.
And that's The Daily Forkast.
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Thanks for watching.
I'm Forkast Justin Solomon.
Until next time.