CoinDCX Becomes India's First Crypto Unicorn As Doubts On Virtual Currencies Remain

CoinDCX became India's first cryptocurrency unicorn after raising 6.70 billion rupees ($90 million) from investors led by Facebook co-founder Eduardo Saverin's B Capital Group, while there are still concerns regarding digital currencies in the country.

Sumit Gupta, the chief executive officer (CEO) and co-founder of CoinDCX, said in an interview this week that the current fundraising round valued the company at $1.1 billion. Coinbase Ventures, Polychain Capital, Block.one and Jump Capital are just a few of the other investors.

Gupta intends to utilise some of the funds to expand his team in India to roughly 400 individuals over the next six months, according to Chainalysis. In India, crypto investments increased to about $6.6 billion in May from $923 million in April 2020.

The investment comes as authorities in India continue to dispute the status of digital currencies, with the central bank recently stating that it has serious concerns about private virtual currencies and that the government will take a definitive stance on the issue.

As reported by Business Standard, Gupta said: "I am pretty sure the industry will be regulated at the right time. We have chosen to put at stake our money and career as we feel this is going to be a very good wealth generation opportunity for people."

CoinDCX, which is registered in Singapore as Primestack Pte., aims to grow its user base to 50 million from 3.5 million over the next few years, with a focus on educating users about crypto and blockchain. In the following months, the company intends to introduce more items, including those aimed at the wealthy.

Investments increased after the Supreme Court overturned a ban on banks aiding crypto trading last year. According to CoinGecko, the four largest cryptocurrency exchanges in India saw a daily trading increase to $159 million from $28.6 million a year ago.

However, the asset's volatility has been a source of concern for regulators. Bitcoin lost more than half of its value after reaching a peak of $64,870 in April, falling to $28,824 in June. The Reserve Bank of India (RBI) is exploring the possibility of developing its own digital currency.

Gupta believes India has what it takes to become a space powerhouse and believes that the country will produce over 100 crypto unicorn startups in the coming years once the regulation is firmed.

According to Gupta: "We [India] have a very tech-savvy population, good mobile penetration, big base of engineers and developers who can leverage blockchain technology."

Cryptocurrency in India

As reported by The Economic Times, this week the Indian government has said that it will take all necessary steps to prevent crypto-assets from being used to fund illegal activities or as part of the payment system.

Minister of State for Finance Pankaj Chaudhary stated in a written reply to Rajya Sabha that the government will proactively explore the use of blockchain technology to usher in the digital economy. He said: "The government does not consider crypto-currencies legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system."

A High-Level Inter-Ministerial Committee (IMC) established under the Chairmanship of the Secretary (Economic Affairs) to study the issues surrounding digital currencies and propose specific actions to be taken in this regard recommended in its report that all private cryptocurrencies, except those issued by the government, be prohibited in India.

The minister said that the government would decide on the IMC's recommendations and any legislative proposals, if any, would be introduced in Parliament following the remaining process.