Before the G-20 summit, which is set to take place on September 8-9, the Financial Stability Board (FSB) and the International Monetary Fund (IMF) circulated a synthesis paper on regulating crypto assets among the G20 member states. Prime Minister Narendra Modi has also called for global collaboration on formulating crypto regulations during the summit. However, traders may need more reasons to be optimistic while the prices of cryptocurrencies remain subdued. For instance, Bitcoin on Monday traded around $25,900 in the global exchanges, almost 61% lower than its all-time high of $67,560 in November 2021.
In an interview with MintGenie, CoinDCX’s COO, Mridul Gupta, tried to reassure anxious traders by speaking about the growing number of participants of the crypto ecosystem in recent times. He also highlighted the multitude of problems that cryptocurrencies can solve and shared his views on digital currencies and the potential of a regulatory framework that the government is likely to roll out.
Q: Bitcoin is trading at less than half of its all-time high. Moreover, the industry and techies have started to talk about AI and ML instead of blockchain, there is a noticeable decline in interest and enthusiasm among investors for digital currencies. What do you have to say about this?
A: It is true that when the prices fall, people tend to invest less and the chatter is reduced. But, there are plenty of ecosystem participants; the number of institutions has increased, with Goldman Sachs and Blackrock joining the fray. The developer activity and retail participation have also increased. Whenever a technology (such as AI & ML) is new, there will be a hype around it.
Q: What is your opinion about the potential and promise of blockchain technology. How can it solve the world problems?
A: Bitcoin and blockchain offer solutions to very big issues. How countries manage currency and inflation affects everyone’s life – if the US spends more dollars, it will affect oil prices, and ultimately impact the average person, and so on. Blockchain enables auditability in real-time basis and (miners are) rewarded in form of currency. Bitcoin, at the same time, is an application of blockchain and it solves transparency when it comes to who is owning and how funds are transferring.
Q: What is your view of central bank digital currency (CBDC) launched by RBI? How is it different from internet banking?
A: CBDC is still in its early stages of development. Until the implementation is shared, it is hard to comment on its usability. It can benefit if implemented in the right way. The idea is to eliminate the need to maintain physical currency. Cash is hard to track, and even when a UPI transaction is taking place, physical movement of currency still occurs – something that is not required in the case of digital currency.
Q: There have been many incidents of crypto scams such as perpetrated by Sam Bankman Fried in FTX in the US, or by Quadriga’s founder Gerald Cotton in Canada. It has shaken the confidence of lay crypto investors significantly about the credibility of this currency as an asset. What is your response to this?
A: People are able to differentiate between the two (scams that happened in the crypto space and the legitimacy of crypto as an asset class). The nuance is clear in the people’s minds. When the investors ask us about cryptos, the question they ask isn’t whether crypto is a scam. They ask what is the right coin they should invest in, what exchange they will choose, the right track they should be following, and so on. This has been the narrative for the past 5 years.
Q: Do you have any expectations from the government regarding the regulatory framework on cryptocurrencies and blockchain anytime soon?
A: The process is slow. The industry is so new that introducing regulations will take time. It is still far off, but the government has already implemented certain guardrails. For instance, the right KYC to follow, the right process for customer redressal, due diligence for bad customers, how to identify bad actors, and how to deal with start-ups that want to partner with exchanges.
Q: You have an IT background and now you are one of the leaders at the organization. What do you enjoy the most: building an application or getting it built by the team?
A: It is more satisfying to see the applications running and the users using them. It does not matter if I built the application or someone else did. Here (at CoinDCX) we call everyone a ‘builder’ as we are still a start-up that is building the right systems and tackling newer problems. The culture is to make sure that most of the work is automated so that we can solve newer problems.