Crypto: Crypto Industry on Hold, Says WazirX’s Nischal Shetty

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“I do not agree with the idea that barriers to entry in terms of wealth are a parameter for entering crypto. It would be an elitist approach,” said Nischal Shetty, founder and CEO of WazirX.

Are we waiting for taxation to be the way forward for crypto investments? Is this something the industry is prepared for right now? Taxation is certainly one of those areas where we, as an industry, are waiting for more clarity. That said, there are more pressing issues that everyone is eager to understand. It starts with the type of regulations the government is thinking of and what checks and balances will be put in place in this new bill; what is allowed and what is not allowed and what can the industry focus on and what are the activities that the industry should probably refrain from?

As you have rightly said, the use of crypto as a form of payment has been a matter of contention for a long time. As an industry, we argue against putting crypto in competition with the Rupee or any other payment channel out there. But clarification is needed on the use cases of crypto on blockchain and the decentralization of applications, NFT. For example, one question asked if the NFT regulation would be comparable to crypto or if it would be a whole new bill that we had to wait for. So many unanswered questions, but in general as an industry, we will have to wait and see what the content of the bill will be.

What has been the impact of this uncertainty in recent days? Have you seen the number of new users decrease or money being withdrawn? Regarding new registrations, after a day or two immediately after the bill, things returned to normal. In terms of massive sales, we have seen a large number of massive sales within 24 hours of the bill being signed, resulting in a sharp drop in crypto prices in India relative to global markets. . The crypto was trading at a 15-20% discount from global prices. There was fear and panic for the first 24-36 hours, then people slowly realized it was too early to read too much in this description and also someone from the ministry said not to Read too much in the description of the bill, wait for the bill. This is what the industry is doing now. Users also wait to see what the contents of the invoice will be before deciding whether to keep or sell.

But has it had an impact on new users, has it had an impact on the opening of new accounts or the arrival of new users? For the first few days. Over the past 24 hours, our average of new listings is comparable to what it was a week ago.

Do you think the definition of private cryptocurrency will be broad enough to encompass popular coins that are currently in use or do you think there will be a stricter and narrower definition? If we were to take inspiration from the 2019 bill where the term private cryptocurrency likely first appeared and based on the discussions we’ve heard, the bill specifically targeted the use case of cryptocurrency as the reason something would come under private cryptocurrency. The problem with crypto is that it doesn’t conform to a particular use case. You can use it however you want. So the question now is whether we are going to distinguish currency-based cryptocurrencies as a use case and say not to use it for that, but you can use it as a commodity for trading or for use on other blockchains? Or do we go for a general definition and just say that everything crypto is currency.

The second part is a very narrow approach to not wanting to classify crypto because overall one of the biggest talking points about crypto has been how to classify that and how to ensure that based on the classification, we can regulate that. I think India will go towards this classification approach. It might be a longer path, but it’s probably the right path.

We’ve seen some countries where they specifically mentioned that you don’t use the payment use case. I don’t remember any of them where they specifically said not to use it for payment, but you can use it for trading and other blockchain activities. And that way what happens is you have that middle lane where you don’t have to worry about disrupting your existing payments infrastructure as a nation, but at the same time you’re not stopping no more innovation in crypto and let this crypto ecosystem grow and move in the right direction.

What does an entry barrier or entry level threshold mean in terms of how many trades like you will need to invest? Am I correct in assuming that a lot of the volume comes from low cost investments and if those were closed then would that make sustainability difficult? I would be less concerned about a few exchange companies with this approach, but more concerned that a majority of people in India in crypto are the younger generation and are going into crypto as a career option likely for the first time around and putting a barrier to entry in terms of net worth will hurt them.

I see it as an elitist approach where you say if you have a lot of money you can be involved in innovation and if you are a newbie and you just want to learn this technology, be a part of it, you can’t. enter it. I really do not agree to put a barrier in terms of wealth. If you want to put a barrier to entry, do so in terms of education. Take people through an education program and if they can make it let them in, I don’t confirm at an entry barrier because imagine if we had barriers to blogging, we had barriers to YouTube channels and we had barriers to everything on the internet, I don’t think we would have progressed that way as a nation where we see people from every city and every village in India participating. I do not agree with the idea that barriers to entry in terms of wealth are this parameter.

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