No worst-case scenario for crypto sector in terms of regulations: Sumit Gupta

Sumit Gupta, co-founder and CEO of CoinDCX, believes that 2021 was a landmark year for both the blockchain and crypto industry. He spoke to Mint on crypto regulations, CoinDCXs growth and industry outlook. 

Edited excerpts:

How big of a disappointment was India not seeing regulations for cryptocurrencies in 2021?

Governments across the world developing rules to regulate cryptocurrencies have expressed the need of discussions and deliberations. While I would have liked to see some movement on the bill, at the same time I also feel a sense of reassurance that by taking more time the government will give the technology its rightful due. As an industry, we have exposure to many developments in the industry and technology and are happy to work together with government agencies to provide data, information, and insights so that we can build better regulations.

This is important because even as the government recognises the transformative potential of crypto and blockchain and is paying close attention to their usage and potential applications in everyday lives, there is a lot of information asymmetry as well.

Is a complete ban on cryptocurrencies possible in India at this point?

Many governments have tried to ban crypto, but its decentralised nature makes it difficult and unviable. After having carefully studied various approaches, including blanket bans, the majority of developed and developing nations have decided to regulate crypto. What is really needed, rather than an arbitrary action like a ban, is what our Prime Minister Narendra Modi mentioned: collaborative efforts at the global level. 

Furthermore, a ban will only cause various kinds of losses to investors, both retail and institutional, entrepreneurs, developers, professionals, and the country will see a larger brain drain. Given that crypto is going to be one of the most critical technologies soon, and India is best-placed nations with its young population, higher mobile and internet penetration and vast developer base, we don’t think India is in a position to isolate itself on the back of fears that can be addressed.

We have been hearing that the RBI wants a full ban on crypto. What is the worst-case scenario that you are looking at in terms of regulations?

RBI has some valid concerns, however, these are not isolated concerns and solutions are currently being discussed across the world. Take for instance, the FATF (Financial Action Task Force) Travel Rule, wherein all exchanges are required to transmit source and beneficiary information at the point of crypto withdrawal. We are already active participants of the Travel Rule and are working on various ways to curb all kinds of misuse of this technology. Further by regulating crypto as an asset class, we can negate all payment use cases with appropriate and timely disclosures. Once we all agree to regulate and foster this industry, I don’t think there is anything like a worst-case scenario.

What kind of growth did you witness 2021?

We have witnessed 58 times rise in our registered users in the last 12 months. We have also scaled our systems exponentially as an exchange within this year and have grown 10-15 times on the scale. Our exchange infrastructure can today process more than two lakh orders per second.

We have seen good traction on a pan-India level, with top cities from all regions including Delhi, Kolkata and Bengaluru. Interestingly, crypto adoption is not restrict to tier-I cities but goes beyond to tier-II cities as well. Some cities such as Indore, Lucknow and Agra are testimony to that trend.

Crypto investors are a largely younger audience within the age bracket of 18 to 34, and comprise more than 70% of our total user base. If we break it down in terms of gender, almost 75% of women investors are new users on CoinDCX, with a male to female ratio of 85:15.

What are the upcoming projects we may anticipate from CoinDCX?

This year, the global crypto market has reached multiple new heightsamassing $3 trillion in market capitalisation and clocking in new all-time highs as crypto gains mainstream traction. With the evident growth and size of the crypto market, it is necessary for countries to embrace the future of finance instead of shying away from it and missing the window of opportunity. As such, education would be key to raising awareness and combating misinformation about crypto.

This is why at CoinDCX, we launched DCXLearn, a full-fledged immersive crypto and blockchain education platform with free courses to foster better understanding of blockchain technology and crypto projects.

On the product front, we will continue our efforts in making our platform more robust, and safe to use for our customers. We will continue to introduce new projects on our platform after appropriate due diligence through our 7 M principles.

Subscribe to Mint Newsletters

* Enter a valid email

* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint.
Download
our App Now!!