Binance has made a move into India’s cryptocurrency marketplace. This market in India is potentially huge but troubled.
Binance, the top crypto exchange by trading volume, announced the news in a blog post. They did not provide details of the deal however sources of the Economic Times estimated the firm was bought out for $5 million–10 million.
The company’s entry into India might at first glance seem surprising, with the local crypto industry having been greatly disrupted by a ban on banking services for crypto firms instigated by the nation’s central bank in April 2018.
A number of local exchanges, including Koinex and Zebpay, have been forced to close, with the remainder moving to survive on crypto-to-crypto trading and avoiding the fiat system.
That’s a strategy employed by WazirX , which launched earlier this year offering crypto-to-crypto and peer-to-peer trades
It has been suggested Binance has a way around the banking issue, having launched Indian rupees on its Binance Fiat Gateway in recent weeks.
Now it says users of WazirX will soon be able to buy the tether (USDT) stablecoin with rupees via WazirX and use USDT to trade any cryptocurrency offered by BInance.com.
“The acquisition of WazirX shows our commitment and dedication to the Indian people and strengthen the blockchain ecosystem in India as well as another step forward in achieving the freedom of money,” said Binance CEO Changpeng “CZ ” Zhao.
Binance has also focused on supporting and developing the Indian blockchain system as a whole. Earlier this year, the India-based startup Matic Network successfully fundraised via the blockchain on Binance Launchpad and another project, Marlin Protocol, secured a USD$3 million seed round from Binance Labs, the investment arm of Binance. Binance X, an initiative to foster innovation in the Binance ecosystem has begun its grassroots efforts to stimulate blockchain development and support in India with its recent event in Bengaluru to invite participation for its fellowship program to the Indian blockchain community.
Challenges still lie ahead for Binance in India, with a government panel said to be mulling legislation that would ban cryptos completely in the country. It would seem that Binance considers that a risk worth taking and, if the estimated acquisition price is in the right region, it’s likely a small amount for the firm to pay to have a foothold as one of few fiat-to-crypto exchanges in the potentially huge market.
“Building fiat-to-crypto bridges remain a key mission for Binance, and WazirX will help this by providing a simple and cohesive way to purchase cryptocurrencies in a country which is home to more than a billion people,” said Binance CFO Wei Zhou.