PayPal’s Venture into Crypto Market Bodes Well for Bitcoin’s Future in India
PayPal’s latest venture into the crypto market may have drummed up significant hype in the industry —as Bitcoin has since surged by up to 15% following the global payment giant’s announcemnet, its eyes on India’s 450 million mobile users and the country standing among its primary markets will likely see India’s crypto industry gain from the move.
Speaking on whether PayPal’s marriage with crypto could be the key to boosting adoption in India once more even in the face of uncertain regulatory clarity, the CEO of Unocoin, Sathvik Viswanath, shares that PayPal’s move into crypto may mean well for India and Asia as a whole.
“Given that PayPal is an established brand name, we believe that this bodes well for the future of bitcoin. While their offering, along with the specifics on how it works, is not out as of yet in India, it appears that it could be a closed loop system where customers will not be able to deposit or withdraw their bitcoin at will,” he said, stressing that traditional financial institutions like PayPal will add a ton of credibility to the space and will create even more opportunities for companies such as Unocoin, India’s oldest crypto exchange.
Despite its over 350 million existing users, PayPal notes that it plans to “significantly increase cryptocurrency’s utility by making it available as a funding source for purchases at its 26 million merchants worldwide.” The success of such a move could help rekindle interest in Indian enthusiasts who just got a ban on crypto-related banking lifted in March 2020 but are discouraged already as they face talks of yet another looming crypto ban.
New interests have reportedly been cultivated in the country of late as crypto platforms offer new services and products to gain users and increase trading volumes. For instance, the country is expected to see cryptocurrency financial services offered at physical branches as digital finance firm Cashaa partners the United Multi State Credit Cooperative Society to provide users with cryptocurrency services alongside traditional banking at 22 locations by December (expand to over 100 branches by 2022).
Regardless, Viswanath shares that offering decentralized finance (DeFi) services in India is interesting and worth keeping a close eye on key developments but maintains still needs more time to have a meaningful impact to bank the unbanked, etc.
“Right now much of the activity is still quite speculative and entrepreneurs are working hard to address real challenges,” he said. “The popularity of Non-Fungible Tokens (NFT) via digitisation of physical assets or securities on blockchain may be needed for users in India to take significant advantage of DeFi.
The CEO, who believes strongly in the “not your keys, not your bitcoin” notion, stands by their fundamental belief that “Bitcoin is the main innovation in the space that people should be considering” because as global adoption of Bitcoin accelerates and companies such as Square and MicroStrategy allocate larger portions of their treasuries into bitcoin, this could bode well for its future. “Bitcoin, afterall, has been the best performing asset over the past decade, and people are taking notice,” he said.
Unocoin earlier this month announced its US$5 mln Series A round led by renowned VC Tim Draper, known for early investments in Skype, Tesla, Twitter, and Robinhood. Upon completion, the funding round – meant for the development of new products and offerings, enhancement of existing infrastructure and technology talent acquisition – is expected to raise the exchange’s valuation to $20 mln.
Vishwanath said the investment is necessary as they’ve seen a dramatic increase of crypto adoption in India following the lifting of the industry-wide ban by the Reserve Bank of India enacted in 2018. He notes that customer growth rates surged by more than 10X following the supreme court’s verdict and trading volume grew by 5X in subsequent months.