Despite regulatory concerns, over 400 start-ups jump onto crypto ecosystem

Despite regulatory uncertainty and the Reserve Bank of India’s (RBI) concerns, India now has close to 400 cryptocurrency-based start-ups offering various services to the crypto ecosystem.

According to data sourced by BusinessLine from Tracxn, there are 380 crypto start-ups and 12 Non-fungible Tokens-based (NFT) start-ups currently operating in the country. Per industry players, in 2021 alone, at least 100 cryptocurrency start-ups have been launched.

“There are many start-ups that are focussed on creating new coins, supporting the exchanges and ecosystem, and some businesses are building investor communities around cryptos. These activities have been very strong this year. Roughly 50-60 crypto start-ups came up last year itself,” Sathvik Vishwanath, co-founder and CEO of cryptocurrency exchange Unocoin, told this newspaper.

Crypto transactions had hit a pause early last year when the RBI told banks not to fulfil payments related to cryptocurrencies. However, with the Supreme Court staying the RBI order, the crypto industry has grown significantly. Start-ups in the space saw funding grow 73 per cent in the first six months of calendar 2021 compared to the whole of 2020. Bengaluru-based crypto exchange CoinSwitch Kuber and Mumbai-based CoinDCX hit unicorn valuations recently. The average investment per individual has also gone up to ₹10,000 from ₹6,000-8,000 a year or two ago.

‘Protect, don’t ban’

According to experts, policymakers should consider the growth in the ecosystem while putting in place adequate regulations to protect investors.

Seeing the growth in this space, some entrepreneurs such as fintech Walrus’ founder Bhagaban Behera entered the crypto market. Behera and his co-founders decided to launch a social crypto exchange Defy last week, wherein users could create their profiles and share their portfolios and investment thoughts with friends and followers. “For India, the cryptos NFT segment is quite nascent. We want to build simple software and eventually launch crypto mutual funds, credit cards, fixed deposits, SIP plan,” Behera said.

Growth of NFTs

The NFT segment too is slowly gaining ground and finding new formats.

There are all kinds of NFT start-ups from exchanges, start-ups building APIs, tools, infrastructure for creating NFTs etc. “People are going crazy around entertainment, sports, utility-based NFTs, with possibilities to enter into the Metaverse. There is a lot of FOMO around NFTs in the market and we feel it will remain there for some time,” Toshendra Sharma, Founder and CEO, NFTically, told BusinessLine.