Crypto exchange CoinSwitch to be a comprehensive investment platform, to offer mutual funds and FDs, says CEO Ashish Singhal

Over the last couple of years there has been a significant decline in the value of cryptocurrencies. In addition, the Indian government has imposed a 1 per cent TDS (Tax Deducted at Source) on crypto trading. This has resulted in a decline in trading volumes and user activity on several Indian cryptocurrency exchanges. Ashish Singhal, CEO of CoinSwitch, shared his future strategy with Business Today in light of the declining crypto business in India. 

 BT: Following a price correction and tax imposition, crypto trading has significantly dropped in India. Where does Bitcoin go from here?

Ashish Singhal: Last year was a stress test for the crypto ecosystem, with the macroeconomic conditions and bearish investment sentiments weighing down the market. In such downturns, retail investment activity drops. But what was different in India was the additional factor pushing the scale down: the TDS of 1 per cent. However, the market conditions are improving slowly. Last month, Bitcoin crossed $30k for the first time since June 2022. Additionally, if we look at BTC’s historical price cycles, we are almost a year away from the next halving of rewards, which historically has had a positive impact on Bitcoin’s price.

I believe that a bear market is the best time to build. We know this is true from previous downcycles in tech—the best technology products were built through the dotcom bubble burst. I see this happening in the crypto space as well. Be it the Ethereum merge last year or the more recent Shapella upgrade, Polygon’s advancement on Zero-Knowledge, the critical pieces of the Web3 infrastructure were being laid despite the downturn. 

BT: What is your strategy for achieving the next level of growth?

Ashish Singhal: Our plan has always been to grow CoinSwitch into a comprehensive investing platform for India. Our mission statement—Make Money Equal for All—speaks to this goal. We began this journey with crypto assets, as India is a young and digital-savvy country. This provides us with a solid base to expand to other asset classes, and to become India’s go-to wealth-tech destination. A lot of Indians started their investing journey with Crypto. We want to grow with them, provide them with the right assortment of asset classes, simplified and tailored for their needs; this includes products like fixed deposit, mutual funds and more. We are aiming to announce these products by the end of this financial year.  

At heart, we will always be a crypto-first investing platform. But the problem that we are trying to solve is bigger. Just about 3 per cent of Indians actively invest in stocks; the participation rate in mutual funds is also similar. For India to have true economic participation, the retail participation in markets should be much higher… more Indians should be investing. Our objective is to bridge this gap, to empower Indians to invest, and to help them build wealth. To this end, we have scaled our tech-stack, and we have hired industry experts to be part of our leadership team.

BT: Have you taken all the required licences from Sebi, RBI and IRDAI?

Ashish Singhal: We have always been compliant with the laws of the land. All our investment products, be it crypto or beyond, will be fully compliant with the existing rules and standards. We will share the details as and when we announce our new products.

BT: Many crypto exchanges have now ventured into Web 3 business. What exactly is it and are you optimistic about it?

Ashish Singhal: Web3, or an open and shared internet with no centralized Big Tech gatekeepers, is a natural evolution of crypto. Crypto has made possible creation, ownership, and transfer of value over the internet. This opens up the opportunity to value and safeguard online data, digitalization of real-world assets and more. Innovations in this space will slowly lead to the transformation of the internet as we now know it. We will have a more open internet in tune with the lives we will be leading tomorrow—we will share value and experiences online, and yet retain control and privacy. This is the Web3 mission. Today, most of us understand terms like Metaverse, Blockchain and crypto, hinting that the technological shift has already started.

The potential of Web3 and its underlying blockchain technology is realised by governments as well as the private sector. It has been deployed across various government offices. For instance, last year, the LegitDoc platform was used by the Maharashtra State Board of Skill Development (MSBSD) to anchor around 100,000 verifiable digital diplomas on the Polygon blockchain. This technology has also helped elevate supply chain systems across industries such as agriculture, food, etc.

This firm belief in a Web3 future is the reasoning behind the Web3 Discovery Fund from CoinSwitch Ventures. We identify and support startups that are advancing the future of blockchain technology and help them scale faster. We provide early-stage founders with the capital, network connections and, most importantly, the guidance they need to transform the Web3 landscape in India. 

BT: What are your views on NFT business? Do you offer the service?

Ashish Singhal: We do not offer NFT trading on our platform, but we do believe that NFTs will have a central role to play in the Web3 future, especially on identity verification, token-gated services and so on. This is an evolving space, and we are already seeing several startups leveraging the potential of NFTs to build use cases beyond trading.

BT: What are some of the challenges that the crypto industry is facing and what actions the industry is taking to sail through the rough times?

Ashish Singhal: The crypto industry has faced several challenges in the past year, including the collapse of FTX and a significant decrease in prices. However, these challenges have presented opportunities for the industry to showcase the right players and practices. At CoinSwitch, we were among the first Indian crypto businesses to release a proof of reserves, demonstrating our commitment to transparency and security and reassuring users that their funds are safe and secure.

Despite the challenges of market volatility and security concerns, we have seen an increase in user activity on our platform as the market recovers. To navigate through these rough times, the industry is taking proactive steps to promote transparency, security, and innovation. For instance, some companies are implementing proof-of-reserve systems to assure users of the safety of their funds. The recent PMLA notification by the Ministry of Finance further helps establish greater transparency in the ecosystem.

We are optimistic about the industry's future and believe that by prioritizing transparency, security, and innovation, we can overcome the challenges we face and continue to grow.