Responding to the repeal of what many dubbed a blanket “Bitcoin ban” in India, cryptocurrency giant Binance and local exchange startup WazirX have joined hands to invest a large sum of capital into Indian blockchain startups.
Meet the “Blockchain For India” Fund
Announced in a blog post published on March 16th, Binance and WazirX have collectively pooled $50 million worth of Binance Coin, Binance USD stablecoin, and Wazit’s native token WRX. In doing so, the two firms created the “Blockchain for India” fund to “support the development and growth of blockchain startups in India.”
Notably, WazirX is a wholly-owned subsidiary of Binance, which last year acquired 100% of the firm in a deal that purportedly cost $5 to $10 million.
The fund will invest in blockchain startups “focused on solving industrial and social problems” that face the nation of over one billion people, while also promoting the sustainable growth of “the blockchain startup ecosystem in India.” As CEO of WazirX, Nischal Shetty, said in the blog:
India has the biggest tech talent pool in the world. With this fund, we want to encourage and enable more and more founders and teams to come in and BUIDL. This initiative also shows the incredible potential that the Indian blockchain ecosystem has to offer.
According to Binance, the fund will make investments in both company equity and the tokens of upstarts, ranging from $100,000 to $5 million a pop. Should a startup receive Binance’s blessing, it will be granted access to Binance’s “global blockchain ecosystem” and “mentorship from other founders and leaders within Binance.”
As hinted at earlier in this article, Binance’s new fund comes in response to a pro-crypto regulatory decision.
More specifically, as reported by Blockonomi previously, in a historic ruling, the Indian Supreme Court reversed a bank by the Reserve Bank of India that disallowed any bank from offering services to clients that affiliate themselves with cryptocurrency. This was marked as a massive win for India’s crypto economy, with many explaining how it would allow for local investment in Bitcoin and cryptocurrencies by millions of Indians.
Unfortunately, the RBI is purportedly looking to repeal the reversal of the crypto-banking ban.
Although nothing has been officially confirmed just yet, sources speaking to Indian business news outlet the Economic Times suggested the central bank will petition the decision by citing its opinion that a launch of cryptocurrency exchanges in India will threaten the banking system’s health. The RBI, more specifically, uses tried-and-true narratives like cryptocurrencies are vehicles for money laundering and other illicit acts.
It isn’t clear if this argument holds its water; In its ruling, the Supreme Court denied the RBI’s sentiment that Bitcoin trading directly threatens financial institutions.
Bear Market Funding
This new fund from Binance and WazirX comes as other stakeholders in the crypto industry have continued to siphon capital into industry upstarts.
Case in point: on March 16th, Bitcoin infrastructure startup Bakkt announced that it has just completed a $300 million USD Series B fundraising round, garnering the support of the Intercontinental Exchange (owner of the New York Stock Exchange), Microsoft’s venture capital arm M12, and Boston Consulting Group. These companies participated in the firm’s Series A round, which saw Starbucks chip in.
Also, last week, it was reported that Ethereum wallet Argent, an application focusing on the decentralized finance ecosystem, raised $12 million in a Series A round, led by Paradigm Capital, founder of Compound Robert Leshner, and Index Ventures, bringing the startup’s total raised capital to $16 million.
So while cryptocurrencies may be losing their value at a rapid clip, it is clear that big-name investors see Bitcoin and its ilk as anything but dead.