For the right crypto regulations in India, the industry needs to be involved: Nischal Shetty
The Internet and Mobile Association of India (IAMAI) had moved the Supreme Court of India for a stay on the order in May,
but Shetty realized that the case wasn’t going to be enough, as he believed that the root problem was the lack of crypto regulation and understanding of what the crypto is.
To solve these two issues, he decided to tweet every day and tag India’s leaders and the right people highlighting why the country needs to regulate and understand crypto.
One of the prominent policymakers, who replied to Shetty’s tweets from the campaign, was an Indian politician from Bengaluru,
Rajeev Chandrasekhar, in 2019.
Chandrasekhar is now Minister of State in the Ministry of Skill Development and Entrepreneurship; and Minister of State in the Ministry of Electronics and Information Technology.
There were other ministers as well that Shetty met but he can’t name them as the discussions were private.
What was the general mood in the crypto industry at that time when you started this campaign at a time when the RBI ban on cryptocurrencies was in place?
The situation was pretty bad.
WazirX was new, but there were other exchanges, which were older and larger.
Multiple exchanges shut down and some left the country as they were not able to operate in the country.
A lot of people in crypto back then were really worried and afraid about the state of the crypto ecosystem and the future of investments that they had made.
The mood, in general, was low and there was fear among people.
In fact, the general consensus was that crypto was illegal in India and even owning crypto was not allowed.
Also, the fact that crypto was in a bear market in 2018 didn’t help either.
The year 2018 was really bad for the Indian crypto industry, and people thought of exiting at that point in time.
But campaigns like IndiaWantsCrypto kept people motivated.
The campaign has been completed for nearly three years. What were the big struggles during this phase?
Crypto has always been a challenging sector because of the lack of regulatory clarity.
Right from the banking ban in 2018 to the draft bill in 2019 that talked of regulations, which were more about prohibiting than regulating.
Then we had a bear market of around 2-2.5 years during 2018 and 2019, the investors were demotivated,
and we were not getting enough money from global venture capitalists or funds to build startups.
On top of this, there was confusion about whether crypto is legal or what the government was going to do — support it or shut down the industry.
In terms of regulators and the government, how do you see their perception has changed during this period?
Things have changed tremendously.
First of all, growth-wise, the Indian crypto industry has grown from four-five million people in 2018 to 15-20 million investors now. Second, from a handful of startups, a lot of companies are now working in the crypto sector.
Moreover, today startups can easily attract investments.
From the regulators’ side, we have the finance minister (Nirmala Sitharaman) who has spoken about crypto, and now the Reserve Bank of India (RBI) has talked about central bank digital currency (CBDC).
There is also a greater understanding of crypto and the industry among the media in the country.
Net-net if you see from 2018 to today, India has progressed greatly in terms of every metric that you can track in crypto.
Has it become easier to run a crypto business in India?
Compared to before, yes it has become easier, but if you compare it with the rest of the world, it is still harder.
In the US, you have companies that are able to use the initial public offer (IPO) route, they have some sort of licensing process in place and have clarity.
It is the same in many parts of the world.
To catch up with the rest of the world, we first must have banking access.
Even though the Supreme Court case was won, banking access is still hard to come by for all businesses.
There is still fear and uncertainty among the banks and they are not really sure about servicing the industry.
Second, we need some guidelines from the government or more direction.
We know that the government has been talking about bringing in regulations, however, they may take longer but guidelines can come faster.
Have you replied to the Enforcement Directorate notice to WazirX for Foreign Exchange Management Act (FEMA) violations?
We have cooperated with the agency in the investigation so far and are preparing a response to the detailed notice we have received on FEMA violations.