Why we are bullish on crypto in India

Ryze Labs
24 min readFeb 10, 2022

Not financial advice.


India enters 2022 with a large, rapidly growing economy that the Indian government projects will grow by 9.2% to reach $3.1 trillion this year. According to the IMF (which estimates growth at a more conservative 8.5%), India will retain the title of the fastest growing economy in the world in 2022, beating out China’s growth estimated at 5.6%.

This growth is expected to continue in the near future with “India’s nominal GDP measured in USD terms is forecast to rise from $2.7 trillion in 2021 to $8.4 trillion by 2030”, according to information provider IHS Markit. This means that within a decade, India will overtake Japan to become the second largest economy in Asia-Pacific, and Germany and the UK to rank third in the world.

While Sino Global Capital is generally optimistic about growth in India, broad based economic growth alone is not sufficient cause to present a compelling thesis for crypto in India.

Quick India fact sheet:

  • According to the World Bank, India’s population is 1.35 billion and is growing on average by 1% YoY, making it the world’s largest democracy by population.
  • The median age in India in 2020 was 28.4 years, with China at 38.4 years and the US at 38.3 years according to UN figures.
  • Though India is an old civilization with a rich cultural history, it has only existed as a modern independent state since 1947.
  • India has 1.18 billion mobile connections, 700 million internet users and 600 million smartphones according to the NHA.
  • 80% of Indians over 15 years old have a bank account (World Bank Global Findex Report 2017).
  • The “India Stack”, the moniker for a set of open APIs and digital public goods that aim to unlock the economic primitives of identity, data and payments at population scale, has brought substantial gains in financial inclusion (IMF):
    - The Aadhaar [Digital ID] is a unique 12 digit number given to every Indian citizen using biometric inputs, and is a primary identifier that can be used to roll out several Government welfare schemes and programmes. 1.2 billion people — almost 90% of India’s population — signed up for a digital ID in less than a decade.

- The Unified Payments Interface (UPI) is a new layer to India’s retail payment system that provides near real time fund transfers for bank customers. The UPI is the dominant payment mechanism in India, with 4.6 billion transactions worth Rs 8.26 lakh crore (~US$101.8 billion) taking place in December 2021.

- A third paperless layer of the stack allows for digitization of official documents and information, reducing the paper-based bureaucracy and increasing efficiency and integrity.

- No single aspect of the India Stack is entirely unique. However, its comprehensiveness has succeeded in building a more inclusive digital economy from the bottom up.

India is excelling in multiple strategic areas and there are many reasons to be bullish on India’s future. In this report, we will outline why these and other factors combine to create an environment that we believe makes India one of the most important crypto markets in the world.


While many Asian countries experienced rapid economic development over the course of the latter half of the twentieth century, India lagged behind. This was in no small part due to the country’s protectionism, over-regulation and socialist policies, enforced by the License Raj. The License Raj was a complex system of licenses and rules that were necessary to start and run an Indian company, restrictions included the need for certain licenses to start a new business and increase production capacity, or specific permission to hire and fire workers. With high tariffs, limited import restrictions and outright bans on specific items, imports were effectively shut off. By the 1980s, India had among the highest tariffs in the world.

Source: Foreign Direct Investment in South Asia

These tariffs, among other restrictions, caused one of the world’s largest nations to remain a globally excluded market, deprived of meaningful growth, natural competition and foreign investment.

The repercussions of the License Raj plagued India well into the twenty-first century. Due to the high cost of providing banking and financial services, the high cost of compliance, KYC and the fact that nearly four hundred million Indians lacked any sort of individual identity document, only approximately 35% of adults held a bank account in 2011 according to World Bank estimates. Hundreds of millions of people were disconnected from the formal financial system, resulting in significant losses in productivity, tax income, and socioeconomic development. As you will see, the situation has changed dramatically over the past three decades, particularly since the LPG (Liberalization, Privatization and Globalization) reforms.

Digital India — a foundation for Web3

Mature, interoperable digital infrastructure creates opportunities for novel digital products, services and conveniences previously implausible in a predominantly cash, brick and mortar economy. Such core technologies include:

  • Internet, broadband
  • Mobile telecom and digital communication suites, including apps
  • Data centers and networks
  • Enterprise portals, platforms, systems, and software
  • Cloud services and software
  • Operational security, user identity and data encryption
  • APIs and integrations

We will first focus on internet and mobile penetration, as these form the precursor infrastructure for the digital economies of all countries. We will then examine digital infrastructure and piping — namely, APIs and integrations via the India stack — that links India’s digital economy and makes India a uniquely prime location for Web3 innovation. Lastly, we touch on India’s upcoming CBDC, the “digital rupee”.


Covid-19 lockdowns and a push for rural internet development led to increased growth in internet penetration in recent years, with India catching up to the OECD average according to data from the World Bank. In 2021, the percentage of Indians using the internet breached 60% for the first time and is likely to continue rising.

Building a reliable foundation for a nation’s digital revolution has many positive secondary and tertiary effects. Robust and reliable digital infrastructure precede exponential increases in startup creation, software production, open entrepreneurship programs and sophisticated fintech platforms.

Mobile / Smartphone

India has the second highest number of smartphone users globally, with substantial room for deeper smartphone penetration throughout the country.

India is projected to reach 820 million smartphone users by 2022, as forecast in a report by KPMG and the Indian Cellular and Electronics Association. In 2Q2021, India’s domestic smartphone sales numbered more than 33 million, an 82.3% increase over two years. India’s prospects for digital adoption are promising, as an additional 300–400 million mobile users are expected in the coming decade.

The launch of Reliance Jio in 2016 caused a ripple effect in the telecom industry and facilitated the recent growth of the mobile phone market in India. Jio priced data at a substantial discount to the market at the time, which greatly accelerated data consumption in India. Jio’s launch was an immediate success, claiming a world record of 16 million subscribers in its first month — September 2016 — by promising a year of free, high speed internet. Jio’s go-to-market initiative catalyzed the era of inexpensive data prices in India, as competitors were forced to slash rates in order to compete. Increased consumer demand for affordable high-speed data allowed Jio to 4x their user base in 4 years.

As a result, Indian data consumption grew from 400 MB per month per user on average prior to Jio data plans, to 11 GB after. Today, the global average price per 1GB of data is $5.09. In India, 1GB of data costs $0.09.

The spread of smartphones and cheap data plans offers a golden opportunity for companies to tap into a huge pool of users who are only beginning to enter the digital economy. Netflix took advantage of this unique market environment to offer a mobile-only plan for Indians, the first such offering in the company’s history.

Native Indian crypto companies have also taken advantage of this opportunity. CoinSwitch Kuber, a Bangalore-based global crypto exchange aggregator and trading platform, executed a mobile-first strategy and now receives all its traffic from mobile devices.

As Web3 becomes increasingly mainstream, we will see more and more apps building mobile first UI/UX designs to cater to the huge market of smartphone users, casual gamers and mobile banking customers. India will be a key region for development and user growth for consumer apps in the future.

APIs: The India Stack

Organizations developing digital applications benefit from a comprehensive, well supported tech stack. For India’s governments, corporations, startups and independent developers, a novel, shared tech-stack — IndiaStack — was developed to handle the unprecedented challenge of onboarding more than a billion citizens in a single generation to the digital age.

India’s exponential internet and mobile user growth drove the rapid adoption of IndiaStack. Digital markets like online banking and e-commerce parabolically increased in size and activity, due to the accelerated onboarding of digital consumers.

IndiaStack offers an open-source API suite, providing a universal platform for software development throughout India’s private and public sectors. Specifically, by creating a standardized framework for compliant and collaborative development, IndiaStack’s suite of open APIs serve as critical infrastructure accelerating the digital onboarding of over a billion Indians.

Each layer of the IndiaStack API suite has been designed with the specific needs of the Indian state and population in mind. This has unlocked several economic primitives that form a comprehensive foundation for a Web3 cambrian explosion. We detail some of these below.

Identity and Authentication

IndiaStack democratizes access to digital identities by linking a biometric digital ID (called Aadhaar) issued by Unique Identification Authority of India to the residents of India after a verification process. Aadhaar is used as an identification utility and an enabler for authentication. This unique ID offers people a digital identity and enables them to provide their identity proof anytime, anywhere, without having to carry any physical documentation.

mAadhaar app. Source: NDTV

Unlike a drivers license or voter registration card, the Aadhaar card was not created with any specific use in mind. Instead, it is a universally acceptable government-issued card that can be used for a number of purposes.

Banks and financial institutions accept Aadhar as valid sources of KYC and authentication documentation, like proof of address or a national ID. Indians also use Aadhar to access government services and benefits like pension fund distributions.

This ID authentication functionality is equally useful when performing KYC for crypto institutions including CEXs, crypto interest accounts like BlockFi and fiat on/off ramps.

Payments - UPI

The Unified Payments Interface (UPI) is a system that can aggregate multiple bank accounts (of participating banks) into a single mobile app, allowing users access to several banking and payments features under one hood.

Source: Nandan Nilekani: Identity, Payments, Data empowerment 2019

As it did in many countries, Covid-19 forced a lot of Indian consumers online and accelerated the use of non-cash payments. During this period, UPI payments overtook all others to become the dominant payment mechanism, reaching Rs 73 lakh crore (US$9.9 billion) in 2021.

To illustrate the value of UPI, its growth coincided with a massive uptick in e-retail (B2C) adoption:

Source: https://www.bain.com/insights/how-india-shops-online-2021/
Source: https://www.bain.com/insights/how-india-shops-online-2021/

The UPI ushered in a revolution in online payments and mobile banking in the Indian market. Notably, while in most countries many digitized payment platforms are dominated by middle and upper class users, high UPI penetration growth has been driven by previously unbanked individuals, with even roadside kirana stores (small shops, often with regular customers limited to one street or a block) accepting digital payments.

Source: Forbes India / Shutterstock

This broad market digitization will make it easier for both individuals and businesses to make the jump to Web3, with adoption being less precarious than for users in other markets more accustomed to traditional cash payments.

India’s CBDC

In 2017 a High Level Inter-Ministerial Committee recommended the introduction of an Indian central bank digital currency (CBDC).

In July 2021 the Reserve Bank of India (RBI) held a webinar discussing the benefits and risks of CDBCs and concluding: “Introduction of CBDC has the potential to provide significant benefits, such as reduced dependency on cash, higher seigniorage due to lower transaction costs, and reduced settlement risk. Introduction of CBDC would possibly lead to a more robust, efficient, trusted, regulated and legal tender-based payments option.”

During her 2022–2023 budget speech, finance minister Nirmala Sitharaman announced that India will have its very own official digital currency in the next year or two, going on to say that the introduction of a CBDC will give a big boost to the digital economy in India. A digital rupee is likely to mirror functionality currently available on private company-operated electronic wallets, while being the official sovereign-backed currency.

What this all means

Over time IndiaStack has evolved to include more functionality over the years, culminating in a suite that we believe has value greater than the sum of its parts. The digital infrastructure foundation built by India led to major improvements in financial inclusion metrics. According to a Bank of International Settlements report: “Given the low levels of both financial inclusion and formal identification in 2008, the magnitude of the challenges facing India a little more than a decade ago was clearly immense. Based on the bank account data and the relationship with GDP per capita discussed above, one rough estimate is that it would have taken 47 years to achieve 80% of adults with a bank account had India solely relied on traditional growth processes.”

Source: BIS

IndiaStack has also had a positive impact on the private sector. The APIs and digitization markedly increased the output and innovation of India’s software companies. IndiaStack’s vast ecosystem has resulted in substantially lowered barriers to entry for a broad subset of digital industries. Beneficiaries include existing financial intermediaries, as well as established software companies and new fintech startups. Examples of fintech startups turned major players include Paytm, BharatPe, PayNearby and Setu. Setu, a software startup whose founders were part of the India Stack team, offers a set of plug-and-play application programming interfaces for financial products and a sandbox where developers can test their applications. International corporations have also taken advantage of this opportunity. One example is Walmart who, through its acquisition of Indian e-commerce giant Flipkart, now owns PhonePe, the market leader in UPI transactions.

India has benefited substantially from the synergies and economic opportunities created by it’s technological development. In fact, there is an argument to be made that given the interconnected “pipes’’ of IndiaStack, the leap in financial inclusion and digitization India has recently achieved has surpassed even the most highly developed nations who, though possessing advanced banking and technology infrastructure, tend to have institutional silos and lack cohesive industry level integration.

At the moment, there is no direct integration of crypto / DeFi technologies with IndiaStack, though we believe that incorporating the stack’s digital payments and KYC capabilities, in the words of Balaji Srinivasan; “helps India domestically by enabling new forms of debt and equity financing for every Indian, by connecting them to global pools of crypto capital. It helps close the $250B+ MSME financing gap, it gives startups access to a burgeoning financial internet, and it allows fast payments for remote workers and remittance recipients.”

What crypto incorporation to IndiaStack may look like. Source: https://balajis.com/add-crypto-to-indiastack/

Whether crypto is integrated in the future or not, the cohesiveness already achieved by IndiaStack coupled with growth in internet and mobile penetration lays a solid foundation for Web3 protocols eager to build products and services for a digitally proficient India market.

India’s Web3 Awakening

According to recent estimates from Chainalysis, India has the second highest rate of crypto adoption in the world, based on sizable transaction volumes on peer-to-peer platforms (when adjusted for purchasing power parity per capita and internet-using population).

The importance of blockchain technology has also been recognized by the public sector, with Indian states implementing a range of blockchain projects targeting public services.

More than 15 million retail crypto investors are Indians

  • CoinSwitch data suggests that as of August 2021, the average age of an Indian crypto investor is 24. In addition, for more than 65% of their users, crypto was the first asset class that they invested in besides having a traditional bank fixed deposit,
  • Account registrations from users in Tier-II and Tier-III have boosted several CEX companies to over 2,000% user base growth in 2021.

Indian Web3 participation is still only at 7.5% of the population, however mainstream catalysts such as NFTs, gaming, and favorable regulations are all promising signals of India’s growing Web3 mindshare. Furthermore, with India moving closer and closer to regulation and legitimization, there may be opportunities for domestically domiciled and regulated institutions, e.g. brokerages like Zerodha, to provide professional services on a large scale throughout the Indian market, which would be a major boon for crypto adoption in the country, and globally.

Bollywood’s Breakthrough NFTs

Over the past few months, numerous Indian celebrities have dropped official NFT collections. Notable NFT fans include Amitabh Bachchan, who auctioned his first collection in November 2021, and Salman Khan, who announced a partnership with NFT marketplace Bollycoin in October.

Source: https://twitter.com/BeingSalmanKhan/status/1448181752455856130?s=20

Several other actors and Bollywood musicians have signed up with NFT marketplaces. Mumbai-based crypto startup WazirX rolled out its NFT platform in April 2021 with fifteen creators from the 15,000 applications it received. So far, they have around 1,000 artists and 400 collectors with a waitlist of nearly 20,000 artists. WazirX’s native NFT platform has recorded over $400,000 worth of sales between July and October 2021, with projected seven-figure 2021 revenues.

Source: https://nft.wazirx.org/

In the sports realm, Faze Technologies has signed a partnership with the International Cricket Council (ICC) to create exclusive digital collectibles (using NFTs) for cricket via FanCraze.

Source: https://www.fancraze.com/

The Cricket Foundation (the first of its kind crypto ecosystem dedicated to the sport), co-founded by former cricketer Parthiv Patel along with Pruthvi Rao. The foundation launched CricketCrazy, an NFT marketplace for cricket in October 2021.

Source: https://cricketcrazy.io/

The NFT craze has revolutionized sport, Bollywood, and other creative industries by providing the opportunity for sports personalities, celebrities and creators to deliver collectibles and art directly to independent collectors, democratizing the exhibition process. There is a diverse range of substance and style exhibited by multiple Indian artists on Foundation, Opensea, Rarible, Kalamint and other NFT platforms.

In addition, various NFT events were held during 2021, most important being NFTKochi which was India’s largest NFT Conference, NFT Art Exhibit and NFT Festival. It was held on December 18 2021 in the coastal city of Kochi, the commercial capital of the Indian state of Kerala. The event was a massive success and brought together prominent artists and NFT collectors under one roof. Timeline of Events- https://twitter.com/SinoGlobalCap/status/1473319708963536896.

Source: https://twitter.com/SinoGlobalCap/status/1473319708963536896

Gaming in India

According to a KPMG report, the number of online gamers in India grew from ~250 million in 2018 to ~400 million by mid 2020, with the sector expected to triple in value and reach $3.9 billion by 2025. Over 50% of India’s population is below the age of 25, with this age group accounting for 60% of the nation’s gamers (https://www.investindia.gov.in/team-india-blogs/rise-indian-gaming-industry-tekken-ludo-king).

Source: KPMG
  • Mobile gaming now dominates the Indian gaming industry, accounting for more than 90% of the $1.6 billion market, and is predicted to rise to $3.9 billion by 2025.
  • Axie Infinity Scholarships have expanded across India with the Axie India discord server having almost 350 verified scholars. In fact, for many Indians, Axie truly was a game changer, positively impacting the lives of many gamers during Covid-19.
  • YGG and other large guilds are actively recruiting players and partners from the Indian subcontinent, even launching a dedicated subDAO; Indi.gg.

Fantasy Sports

According to the Ficci-EY report “Playing by new rules”, fantasy sports grew 24% in 2020 despite the absence of major Indian sporting events due to Covid restrictions. This growth was primarily on the back of the IPL (Indian Premier League) cricket Season13 held in the last quarter of 2020, to the delight of fans. The fantasy sports user base is currently 100 million and is expected to reach 150 million by the next IPL.

A key factor which led to recent growth of transaction-based gaming (games involving payment as opposed to monetized advertisements or certain in-app purchases) was the growth in India’s digital payments ecosystem.

Fantasy Sports are both popular and controversial in India. In August 2021, the Supreme Court of India dismissed an appeal against a Rajasthan High Court verdict, with the SC ruling that the popular online cricket betting fantasy game Dream 11 requires skill and is not gambling. This ruling helped to raise knowledge about the legality of fantasy sports and, as a result, encouraged more sports enthusiasts to join.

Within India’s ruling, games of chance whereby the outcome of the game is heavily influenced by a random result, is treated as illegal. Games of skill on the other hand, where the outcome is predominantly determined through a player’s mental skill, are mostly considered legal. This clarification has brought more clarity to the sector and fueled rapid market growth. The Indian fantasy sports sector is expected to reach $2.5 billion in 2022, according to Ficci-EY analysis.

According to a recent report ‘Business of Fantasy Sports’ published by the Federation of Indian Fantasy Sports (FIFS) and KPMG, gross revenue of fantasy sports operators stood at Rs. ~2,400 crores (US$ 340.47 million) for FY20 compared with Rs. ~920 crores (US$ 131.64 million) in FY19, a ~3x YoY increase. This has opened the floodgates in India as multiple platforms such as MPL, Zapak and Criplay are onboarding users on a massive scale. More Blockchain related fantasy platforms are being set up and gaining traction due to endorsements from current and former players of the Indian National Cricket Team.

Blockchain gaming hasn’t yet reached critical mass in India. The opportunity presented by play-to-earn is an opportunity which should not be overlooked. It gives professional gamers a new career option which is already slowly gaining momentum. NFT’s and DeFi continue to revolutionize value creation in gaming. Some of the projects in India who are working on crypto gaming are mentioned below.

The Workshop of Crypto — Desi Developers and the Democratization of Talent

India’s economic development has been increasingly intertwined with the nation’s technological output, mainly in software and engineering. India’s reputation for inexpensive and quality software production is to be expected with its army of 5.8 million developers, the second-largest globally as estimated by GitHub.

According to a UNESCO report, India produces approximately 2.7 million STEM graduates per year, almost 4x America’s yearly output (~700k).

Image source: Statistica

Though UNESCO did not publish data for China. In 2016, the World Economic Forum said that China actually produced 4.7 million STEM graduates a year, which would exceed India’s earlier reported number of 2018, by a large margin. However, according to the [U.S.] National Science Foundation, China classifies engineering and science fields quite broadly, leading to a lack of comparability in the data. The U.S. government agency counted approximately 1.6 million Chinese science and engineering graduates in 2014.

Notably, most of America’s most prestigious schools (i.e. Ivy Leagues) have a minority of the student body in STEM, particularly CS programs. India’s most prestigious institutions, particularly the IIT and IIM schools, are largely STEM focused and feature notoriously brutal, rigorous coursework, and an extremely difficult entrance exam. These high standards have nurtured an environment for excellence, and created a desirable recruitment base for technology-based startups.

When it comes to Silicon Valley, Indians have had a substantial impact on leadership and innovation.

Source: The Times of India
Source: 2021 Silicon Valley Software Engineering Talent Report

Web3 caters to India’s abundance of gen Z talent, by offering an abundance of opportunity. The democratization of talent and global scale of blockchain development has normalized protocols with global teams of elite developers, appealing to India’s many ambitious students.

Comprehensive courses on blockchain architecture and Web3 protocol design are already offered at top programs such as IIIT Bangalore, IIIT Hyderabad, IIITM Kerala. Students and faculty at these institutions often have high baseline technical skills, giving them a great foundation to make the transition to Web3 development. IIT’s high standards and rigorous coursework are recognized domestically and abroad as world-class, making these institutions prime recruiting grounds for young talent. Bright young students considering careers are bound to find promise of a highly meritocratic Web3 industry with unrivaled upside in earning potential. As for direct employment, In it’s 2021 CryptoTech report, Indian trade association NASSCOM estimates over 50,000 individuals in India employed in Web3 roles such as financial infrastructure, software development, analytics and other functions, rising to around 800,000 by 2030.

Indian Unicorns

Over 350 blockchain startups now operate domestically in India according to the Observer Research Foundation.

  • The traditional startup ecosystem in India yielded three unicorns per month on average in 2021, raising the country’s tally to a record 81.
  • India has become an ideal habitat for unicorns, rising to 3rd globally according to a Hurun India report.
  • India’s first Web3 unicorn, CoinDCX minted in 2021 (https://qz.com/india/2046046/how-coindcx-became-indias-first-cryptocurrency-unicorn/). CoinDCX, a cryptocurrency exchange and the first Indian blockchain company to break the 10 figure barrier, has focused on onboarding consumers at scale, skillfully executing on a retail-centered business model, as reflected in its $1.1b valuation.
  • This impressive growth has been supported by over $630m in investments dedicated to Indian blockchain companies.
  • According to NASSCOM, institutional investment also grew to over $25m, with dozens of banks, asset managers, and insurance companies participating in early-stage Web3 fundraising.
  • The revenues brought in by Web3 unicorns can be attributed to breakthrough milestones in user registration, by almost entirely retail users.

Polygon: Desi Crypto’s Magnum Opus

Polygon, formerly Matic, the swiss army of Ethereum scaling was founded by Jaynti Kanani, Sandeep Nailwal, Anurag Arjun, and Serbian programmer and entrepreneur Mihailo Bjelic in 2017. Polygon’s legacy as India’s flagship Web3 Ecosystem cannot be understated:

  • In January 2021, the Ministry of Electronics and Information Technology issued a draft concerning India’s national strategy on blockchain products. The report forecasted that by EoY 2022, at least one business worldwide, created using blockchain technology, would be worth $10 billion. India’s own Polygon was able to breach the $10b valuation mark by only mid-2021.
  • Polygon also took on significant risk in building out a standalone L1 ecosystem, given an almost entirely Indian team operating in India’s uncertain regulatory environment. Organizationally, Polygon aimed to differentiate itself from others by taking an active role in assisting the development of projects within the Matic ecosystem and kickstarting a broader Indian Web3 momentum.
  • In order to realize their ambitious goals, Polygon sponsored and hosted upwards of 200 hackathons in India over the last 2 years. Through their Developer Support Program, India’s blockchain developers were provided technical, financial, talent sourcing, and outreach-related support. Furthermore, Polygon assisted up-and-coming projects via their Matic Ecosystem Initiative for largely India-based domestic teams, for example, Marlin Protocol.

Polygon’s Empire: Scaling beyond L1

  • Business Development: Matic’s rebrand to Polygon signified a strategic change to become a layer-two aggregator as well as a flexible chain capable of diverse on-chain functionality, including roll-ups and other scaling mechanisms.
  • M&A: Polygon acquired Hermez Network in 2021, in order to cement Polygon’s ambition to implement a comprehensive on-chain solution for all Ethereum scaling technologies. Shortly later, the launch of Polygon Miden, an EVM compatible rollup powered by zk-STARKs, was announced. To date Polygon has spent more than $1b in the development of zero-knowledge technology.
  • Partnerships: The project has had multiple collaborations in India, the most notable being with the consulting wing of Infosys Ltd, one of the largest IT companies in India called M-Setu which is an open-source bridge that allows enterprises to cross-operate using the Ethereum blockchain.

Polygon Studios

Polygon Studios is a targeted initiative for contributors to the development of Polygon’s gaming metaverse and NFT ecosystems. Polygon’s initiative supports and provides infrastructure for blockchain game builders, as well as grants to attract artists and investors to their NFT ecosystem. Specifically, the Polygon Studios entity intends on releasing SDKs for developers, investing in smaller companies, marketing the platform as an accelerator and expanding technological support to developers. In a major vote of confidence for the platform, Polygon Studios recently onboarded YouTube’s head of gaming, Ryan Wyatt, to head the team.

Regulatory landscape — a timeline

Before we start, it should be noted that India has never banned cryptocurrency by law, nor has it ever been illegal to hold cryptocurrency, at any point of time.

2013–2017: The Phantom Menace

The existence of cryptocurrencies was initially recognised by Indian law via circulars published by the RBI. These circulars informed “users, holders, and traders” of cryptocurrencies on the possible hazards they face. Otherwise, not much activity.

​​2018: RBI strikes back

Following the initial circulars, the RBI issued a statement on April 5, 2018, ordering all its regulated entities (banks, non-banking financial companies, and payment system service providers) to cease dealing in virtual currencies and providing services to facilitate such dealing or settlement. Furthermore, any Regulated Entities who currently provide such services must cease these activities within three months of the circular’s date. In 2018, a writ petition was filed against this same circular.

2020: A New Hope

On March 4th 2020, in the case of the Internet and Mobile Association of India vs RBI, the Supreme Court of India adjudicated the case in favor of permissionless Web3 ecosystems. This result was an important predictive indicator of the public sector’s recognition of crypto’s strategic and economic value.

2020 also saw the release of the first of a two-part draft strategy document titled Blockchain: The India Strategy. According to the strategy paper, blockchain technology may be used to improve business and governance processes. The strategy paper recognised cryptocurrencies as a unique asset class that could represent network ownership (like shares of a firm) and also serve as a fundamental unit of value exchange.

2021: Rise of Regulation

In January 2021, the Ministry of Electronics and Information Technology issued a sequel to the “National Strategy on Blockchain” paper, over a year after the first strategy paper publication. The ambiguous nature of tokens, lack of Know-Your-Customer (“KYC”) norms, non-inclusion in the digital signature framework, and lack of adequate data protection provisions were all highlighted as regulatory gaps in the legacy system. The strategy sequel listed a wide range of potential blockchain applications of national interest, including logistics, supply chain management, Identity management, e-Voting, IoT Device Management and Security, Microfinance for Self-Help Groups (SHG) to name a few.

In early January, the RBI issued a booklet titled “Payments and Settlement Systems in India, Journey in the Second Decade of the Millennium 2010–2020” in which it defined a CBDC as “a legal tender and a central bank liability in digital form denominated in a sovereign currency and appearing on the central bank’s balance sheet. It is in the form of electronic currency which can be converted or exchanged at par with similarly denominated cash and traditional central bank deposits.”

The Ministry of Corporate Affairs issued a notification on March 24, 2021, amending Schedule III of the Companies Act, 2013. Schedule III specifies how businesses must generate profit and loss statements and balance sheets for submission to the government. The updated Schedule III requires Indian enterprises to report the following information.

  1. Profit or loss on transactions involving cryptocurrency;
  2. Amount of currency held as at the reporting date; and
  3. Deposits or advances from any person for the purpose of trading or investing in cryptocurrency.

Responding to reports that certain banks were still quoting from the RBI’s earlier circular, the RBI issued a circular on May 31, 2021, where it clarified that banks and Regulated Entities were no longer bound by the earlier 2018 Circular, as it was no longer valid in light of the SC Judgment.

Current Regulatory Status: A Prudent Approach

Recent updates summarized: https://twitter.com/SinoGlobalCap/status/1488818279036694528.



India is brimming with opportunities and becoming a major international hub for blockchain development is only a matter of time.

Owing to its digital ready consumer base, digital infrastructure, robust tech workforce, local and state level support for crypto and cheap data rates, India will command its position in the crypto space, displaying a level of growth and innovation not seen since the late 1990s and the rise of the internet.

By providing adequate incentive to firms and companies to expand their operations, the Indian market is open for business. Indian crypto startups and businesses are riding massive waves of funding and investment driven by their innovation, quality and talent, adding value to the ecosystem each year.

As the decade drives on, Indian startups will be a major source of development and upheaval in the crypto space, in some cases eclipsing some current hegemonies. Owing to these factors and the government’s changing attitude towards space, Sino Global Capital is extremely bullish on crypto in India.

Disclaimer: This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained here constitutes a solicitation, recommendation. endorsement or offer by Sino or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.