Ashish Singhal, Founder and CEO of CoinSwitch Kuber, a cryptocurrency exchange which turned unicorn this year, is upbeat about the prospects of a regulated framework under which cryptocurrency can be traded in India, and says the Government is realising the potential of crypto and blockchain to meet the growing needs of Digital India. As co-chair of the Blockchain and Crypto Assets Council (BACC), he assures that the industry is working closely with the policy-makers to build a secure crypto environment and bring financial well-being to every Indian.
Please take us through the journey of Coinswitch Kuber, right from the idea stage to this day.
CoinSwitch was founded by me, along with Govind Soni (CTO) and Vimal Sagar Tiwari (COO), who had hands-on experience in building core systems at large technology companies like Amazon, Accenture, and Zynga. The three of us had been friends for 14 years, and won all major hackathons in India that you can think of, including Sequoia, Google, Amazon, etc. The idea of CoinSwitch also started as a hack, which later grew to what it is today — the largest (in terms of users - 13 million registered users) and most valued crypto unicorn in India at a valuation of $1.9 billion.
CoinSwitch started as a crypto-to-crypto exchange, helping users discover the best price of crypto, which varies across exchanges. CoinSwitch was doing a million dollars GMV a day within a month of its launch, got funded by Sequoia Capital, and continued to grow rapidly. In 2020, when the RBI ban on crypto was lifted in India, we decided to launch the new venture CoinSwitch Kuber in India. The idea in India was to address the market gap — as many retail users in India were under-served; they were going to an exchange, trying to understand complicated graphs, complicated order books to get into crypto. We assumed that many digital natives, who are used to ordering food, cab, groceries at one click, may not get into crypto as it was quite complex. So we launched CoinSwitch Kuber in 2020 with the mission to make crypto investing as simple as ordering food online. Backed by reputed investors including Andreessen Horowitz, Tiger Global, Sequoia Capital, Ribbit Capital, Paradigm and Coinbase Venture, CoinSwitch Kuber is creating an investment ecosystem that simplifies investing in crypto for retail users. We were Andreessen Horowitz’s first investment in an Indian start-up as well as Tiger Global's first investment in an Indian crypto company.
Customer obsession and simplicity, which Amazon almost perfected in the last 20 years, are two core values that I and Govind (both ex-Amazonians) have brought to CoinSwitch. Coupled with Vimal’s expertise in building simple and engaging products in the gaming industry, and the culmination of our learnings is what constitutes CoinSwitch today.
What is the insight behind the Ab #KuchTohBadlega campaign, and having actor Ranveer Singh as your official brand ambassador?
#KuchTohBadlega is CoinSwitch Kuber's latest 360-degree ad campaign featuring Ranveer Singh that ran across various online and digital platforms, including television, print, and OTT platform Hotstar. A classic Indian crypto enthusiast is a digital native, more often than not a first-time investor, less than 28-year-old resident in a non-metro city. We are using multiple mediums to educate people on the benefits of investment, how to improve financial well-being, how to make informed financial decisions, how to start investing, what to research before investing, and so on.
In March 2020, when the Supreme Court overturned RBI's ban on cyptocurrency, you paused global operations to focus solely on India. Now, what are your plans outside India, especially in jurisdictions where crypto is legal?
We ideally would not want to leave India. Our discussions over the last few weeks indicate there is broad agreement on ensuring customers are protected, financial system stability is reinforced and India is able to take advantage of the crypto technology revolution. The crypto industry is hopeful that the Government will involve the industry stakeholders while drafting the bill.
Overall, what are your focus areas for the company? How is CoinSwitch Kuber going about being future-ready?
CoinSwitch Kuber is on a mission to make money equal for all. We are simplifying crypto-asset investing to make it as simple as ordering food online, keeping investor (crypto users) protection at the forefront. Even though crypto investing is currently unregulated, we want to be future-ready. So, we use a robust Know-Your-Client (KYC) process during our user on-boarding. To start trading on our platform, it is required that the name on KYC documents match with the bank account details to validate the user's identity. We permit only resident Indian bank accounts on the platform. We also do a name screening (for Politically Exposed Person status, sanctioned list and negative news) when the user is making payments beyond a threshold level.
Tell us about Ashish Singhal, the person, beyond the realm of work. What are you passionate about?
I have always loved tinkering with and building things. One of my passion projects is to create a better way of curating gifts for people I love and appreciate.
THE CURRENT CRYPTOVERSE
In your view, how will the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 turn out? What happens to investors in the eventuality of a ban on private cryptocurrencies in India?
Our discussions over the last few weeks indicate there is broad agreement on ensuring customers are protected, financial system stability is reinforced and India is able to take advantage of the crypto technology revolution. We will be able to comment further after we receive official communication from the Government.
What do you have to say about the Government's proposal to bring in RBI-backed central bank digital currency (CBDC)? How do you envisage the cryptoverse in that scenario?
We as an industry stand by the Government and believe that a CBDC is the right way to solve the problem of digitization.
What is the ideal scenario that you would like to suggest, keeping in mind the interest of investors and the regulator's viewpoint?
We are hopeful that the regulatory framework for crypto-asset investing will focus on four main areas:
Crypto should be classified as an asset. It is similarly regulated in many other countries, and almost all use cases of crypto are an investment and not payment.
There should be a proper framework for the movement of funds.
The industry needs rigorous KYC (know your customer) procedures.
A proper reporting structure must be put in place.
What investment options are you suggesting to your customer base? How do you ensure that customers' funds are safe just now?
We do not offer any investment advice to customers. We have a future-ready KYC procedure. We follow strict self-regulatory practices, similar to what the other regulated financial entities follow, to provide comfort and trust to regulators and users. For instance, as part of our self-regulatory measures, CoinSwitch Kuber has suspended 1,80,000 accounts in the past six months, and we are keeping a close watch on around 2,00,000 accounts we suspect can be malicious.
What are some of your priorities as co-chair of the Blockchain and Crypto Assets Council (BACC) of the Internet and Mobile Association of India (IAMAI)?
As cryptocurrencies are getting further mainstreamed in India, the industry is working closely with the regulators and policy-makers to build a prosperous and secure crypto environment to put India on the global crypto map. We believe that a progressive regulatory framework will foster innovation in financial offerings to bring financial well-being to every Indian.
Can India afford to miss the bus on cryptocurrency? What next for crypto exchanges?
As of now, we are looking forward to official communication from the Government. Crypto has become much bigger than the asset class itself. Web 3 is the new Internet. Tomorrow's Amazon, Google, Facebook would be built on blockchain and hopefully would come from India. India has the chance, which it also had earlier when the Internet originated, to build these technologies in-house for the world. We believe the Government is also seeing it now and understanding the potential of crypto and blockchain in the growing needs of the Digital India that we want to build.
