Companies

Yatti Soni | Bengaluru, May 9 | Updated on: May 09, 2022

‘Company also intends to invest in the larger Web3 ecosystem’

Cryptocurrency exchange CoinDCX may launch an NFT marketplace as part of its plan to offer newassets on the platform.  

Last month, CoinDCX raised $135 million in its Series D funding round at a valuation of over $2 billion. The company said it has 15 million registered users as of May 2022.

“We don’t want to be the creators of new assets because we believe that it is important to be the provider. The moment we start launching our own projects. We are not doing justice to either of the two visions. So, we might decide to do an NFT marketplace, which is connecting creators and users for buying NFT, but we will not launch our own NFT, or our own Web3 project,” CoinDCX’s Chief Operating Officer Mridul Gupta, told BusinessLine.

Unlike its competitors, which have plans to expand beyond cryptos, CoinDCX has no plans of launching equities or mutual funds. Gupta noted that there are enough people solving for traditional asset classes, and so CoinDCX would rather go deeper into cryptos. 

The company also intends to invest in the larger Web3 ecosystem. “We are finding the right way to support a large number of web3 companies coming out of India. The support can be in form of capital, information, or to provide them with initial incubation. There are multiple ways we are thinking about it. Polygon is obviously a big success from India, but they could be like 50 such web3 success stories from India in times to come,” Gupta added. 

While the crypto industry is still operating under regulatory ambiguity, India is reported to have the second-highest number of crypto investors in the world. CoinDCX competes with companies such as CoinSwitch Kuber, Coinbase, WazirX, and Zebpay, among others, in the India market.

However, Gupta doesn’t see competition as a concern, and believes there is room for every player to grow rapidly. “As the industry grows, there will be some winners, who will have a larger share of the market. If you stand right by the user in this market, you will win and if you stand right by the compliance, you will win. Those are innovation pillars of making crypto exchange business successful,” he added. 

Trading volumes fall

Lately, crypto exchanges in India have witnessed around 70 per cent drop in their trading volumes. The drop in volumes started after India implemented its new tax rules on April 1. Along with the new tax rules, NPCI’s statement that it is not aware of any crypto exchange using UPI came as a further blow to the industry. Post this statement, many payment aggregators and banks stopped supporting UPI-enabled deposits on crypto exchange platforms. 

To this, Gupta said that payments are a problem for the industry not just in India but also globally. However, this has not stopped the growth of the user base or deposits. He added that it is not the simplest experience like one would find on other consumer apps but people are participating. 

On the drop in trading volumes, Shah said trading volumes are a function of the market, so it keeps going up and down. There are multiple factors that contribute to it and it is a cyclical industry. “You will have cycles of trading volume going up and going down, that is the nature of the business. It’s more volatile than the equities,” he added. Post the announcement of new tax rules, the company said it has seen an upward trend in the investors’ portfolio size and increasing participation from people between the age group of 25-35 years of age.

Published on May 09, 2022