Crypto news: Major Indian bank partners with WazirX; VC backers circle Polygon
Kotak, one of India’s largest private banks, has reportedly partnered with one of the Indian crypto market’s leading exchanges – WazirX (WRX).
According to Indian media outlet The Economic Times, the banking giant is the first to “open its doors to the crypto community”. This comes amid growing positivity that India’s government is looking to regulate the crypto market and not impose industry-crippling bans, as had been recently feared.
Amid a growing perception that #cryptocurrencies could be 'regulated' and not banned in India, Kotak has emerged as the first major bank to open its doors to the #crypto community. https://t.co/NzFP95vMOQ
— Economic Times (@EconomicTimes) December 6, 2021
The partnership will apparently allow crypto traders to liquidate their crypto positions through Kotak’s banking services. If this is the case, it will be seen as a major breakthrough for the digital assets industry and community in the world’s sixth-largest economy.
“WazirX has opened an account with Kotak which can be used to receive and pay money to investors trading on the exchange,” said an unnamed source familiar with the matter. “The account is yet to become operational. Paperwork, KYC and some testing are on.”
India hasn’t had the friendliest track record with crypto over the past few years, seemingly looking to ban one week, then changing its mind the next.
In fact, for the past eight months or so, India’s banks have kept a freeze on crypto payments and withdrawals. And that’s despite, in March 2020, the country’s Supreme Court overruling the Reserve Bank of India’s 2018 order for private banks to disengage with crypto companies.
According to the Economic Times article, Rameesh Kailasam, CEO of the industry lobby IndiaTech.org, explained why banks refuse to offer their services even after the Supreme Court ruling:
“Post RBI clarifying to banks in May this year that they cannot cite the 2018 order as it was set aside by the Supreme Court, banks were free to engage with the cryptocurrency ecosystem.
“Since then banks have been permitted to engage provided they undertake necessary due diligence processes around KYC, AML, CFT, PMLA, FEMA, besides looking at their own financial health and risk exposures. Hence banks who have done this homework would typically be free to engage with the industry.”
The WazirX/Kotak partnership is a great sign. But perhaps we shouldn’t quite count chickens before they hatch. The Indian government is still yet to discuss its cryptocurrency bill during its ongoing winter parliamentary session.
What do you think of this? 🤔
— Nischal (Shardeum) ⚡️ (@NischalShetty) December 2, 2021
A gaggle (or a hedge, maybe?) of venture capital investors is reportedly in talks to inject anywhere between US$50 million and US$150 million into the layer 2 Ethereum protocol and sidechain Polygon (MATIC).
Continuing the theme in this article, Polygon is an Indian-founded crypto and is one of the industry’s leading lights, particularly coming into prominence this year as an effective scaling solution for Ethereum, which has had ongoing issues with congestion and high gas/usage fees.
According to a TechCrunch article, which cited “sources familiar with the matter”, Sequoia Capital India and Steadview Capital are apparently among others looking to make the investment through the purchase of MATIC tokens, the native coin of the Polygon network.
“Sources” in India are seemingly getting a workout today.