While a section of the industry said that it could drive away new startups out of India impacting fresh employment opportunities, others have pointed out that it is unlikely to impact the talent flow.
On November 23, a government notification said that the long-awaited Cryptocurrency Bill 2021 is set to be tabled in the Winter Session of Parliament, which will begin on November 29. However, panic set in over the confusing text mentioned in the notification that stated that the bill seeks to prohibit all private cryptocurrencies in the country.
As the initial panic eases, various stakeholders are now trying to figure out what is in store for the nascent but booming industry.
Polygon cofounder Jaynti Kanani said it could be challenging for new entrepreneurs in this space, and they will likely move out of India if they cannot start their venture here.
India has a good crypto talent pool, which is unlikely to be impacted due to crypto's global and decentralised nature, and the growing adoption of remote working across the world. However, a potential ban could make the country less attractive as compared to other countries in terms of job creation and attracting foreign capital, he said.
“There are two things. Builders will build anywhere, either outside India or within the country. If there is a regulation, job creation will happen in India. If you ban it, it won’t happen. The money will go outside and the entrepreneurs and job creators will go out, and build it,” Kanani said.
“If India has to compete with the US or other countries around the globe, you need to be attractive to them in terms of talent, job creation, and also capital,” he added.
In an interview with Moneycontrol on November 24, WazirX co-founder Nischal Shetty also said that a potential ban could lead to a massive brain drain.
"We will lose out on the whole $3-trillion market opportunity. Blockchain is one of the fastest growing job markets; if the ban comes in, India will not learn going forward. With the work-from-home culture and remote working, every startup will move out of India," Shetty said.
Flush with funds and a rise in cryptocurrency trading and mining in India, cryptocurrency exchanges have been on a hiring frenzy in India. Engineering talent is in high demand, since most roles are technical such as blockchain developer, backend developer and crypto engineer, Moneycontrol reported in July.
"Starting salaries at these crypto platforms are at least 25-30 percent higher than traditional IT firms. Hence, engineers are eager to take up such roles. On the non-tech front, digital marketing and product developers are in high demand,” Jose Mathews, senior vice president at PayHire HR Consulting had said at the time.
The crypto industry currently employs about 50,000 people and has the potential to create 8,00,000 jobs by 2030 as more young Indians invest in cryptocurrencies, according to a recent report by IT industry body Nasscom and cryptocurrency exchange WazirX.
“It also has a potential to create an economic value addition of $184 billion in the form of investments and cost savings,” the report said.
According to the report, there are over 230 startups that are operating in India in the CryptoTech space, which is seeing increasing investment from institutional and retail players. Investments close to $6.6 billion have been made in crypto assets by retail investors.
CryptoTech industry is likely to be worth $241 million by 2030 in India, and $2.3 billion by 2026 globally, the report added.
New equilibrium may be found
“Passing of the bill will shake up the crypto linked startup ecosystem in India, till an alternate equilibrium is found. However on the talent front, the largest consumers of crypto talent are IT services and BPM sector players who primarily service crypto ventures outside India," Xpheno cofounder Kamal Karanth told Moneycontrol.
"With 65% of current active crypto openings emerging from the IT services and business-process management (BPM) sector, talent consumption will continue and enlarge as the ecosystem evolves. With the consulting, design, development and support services for overseas crypto services, ventures and products, this sector will continue to lead the pack. While the Bill could be a spoke in the wheel for expansion plans of local startups, talent will find the more waves to ride as the talent needs are global in nature," Karanth added.
Chingari cofounder Sumit Ghosh also echoed a similar sentiment. “One thing is for sure that crypto as a whole as an ecosystem will not be banned or cannot be banned. I think talent flow will be there and that cannot be stopped. And India is going to be where the talents are for sure,” he said.
Chingari recently forayed into crypto with the launch of its own crypto token GARI. Early this month, the company raised $19 million from the public sale of its tokens. This is in addition to $19 million financing the startup from a clutch of 30 investors for its development of its tokens in October this year. The company currently has a 20 people team dedicated to crypto globally and is rapidly expanding it."Even if the outcome is negative, which I don't think it would be, I believe in building in India and will continue to hire talent," he said. However he agreed that in case of the negative outcome, the user base, largely Indians now, will have to move globally. The company is expanding to Indonesia and eventually across Southeast Asian countries.