Even as regulatory uncertainty continues to be a hurdle for India’s cryptocurrency industry, CoinDCX Ventures Managing Director Rohit Jain believes the country will have the highest number of Web3 developers in the world, in a year or so.
Jain also believes India will have the largest or second-largest crypto retail consumer base soon.
Web3 is an idea for a new iteration of the World Wide Web, based on blockchain technology, which incorporates concepts such as decentralisation and token-based economics.
“We don’t have the most Web3 developers but this has seen a trend change over the last six months — not only the quantity but the quality of Web3 developers deep in the blockchain and crypto space has been improving by leaps and bounds,” Jain said.
“So, I fundamentally believe that India will have the highest number of Web3 developers and the most Web3 consumers in the world over 12 to 16 months. Both these things coming together create a very powerful mix,” he added.
Spurt in Web3.0 development
A recent report by Electric Capital revealed that India is witnessing the biggest relative growth in Web3 development compared to other economies, including the US, Germany, the UK, France, Russia and Poland.
The number of Web3 developers who reported their locations increased the most in India and Russia, rising to 5.3 percent and 4.3 percent of the total, respectively.
Another report showed that the size of the crypto market in India increased 39 percent from US$53.1 million in FY2020 to US$74.2 million in FY2021.
Jain believes that the growth in the country’s Web3 developer base will happen despite the regulatory uncertainty in the country.
“We have the most DeFi (decentralised finance) users in the world. We believe that with regulatory certainty and with more clarity, there’s a possibility we could be the largest or second-largest retail crypto base in the world, which presents a very unique opportunity for India,” he said.
Still awaiting clarity
The Indian government introduced taxation on digital assets in its 2022-23 Union Budget, leading to optimism in the industry that it is on a path to regulation and clarity.
But Finance Minister Nirmala Sitharaman then said the tax doesn’t mean the industry has been legalised, roiling the industry and dampening sentiment.
Jain fundamentally believes that there is no question of a ban and the discussion is more about how to regulate the space. He believes that Web3 entrepreneurs in the space should have a “long-term point of view” and should be “very quick in terms of innovation” as the space is evolving right now.
CoinDCX in May announced the launch of CoinDCX Ventures, an investment initiative that will fund early-stage crypto and blockchain startups. Jain was appointed as senior vice president and head of ventures and investments to lead CoinDCX Ventures.
The platform will focus on the Web3 ecosystem in India and globally, and plans to invest ₹100 crore in startups over the next 12 months.
CoinDCX is one of the leading crypto exchanges in India. Established in 2018, it has provided the community with investing and trading solutions for crypto-based financial products for retail, HNI and enterprise customers.
The industry’s take
Sharat Chandra, VP, Research & Strategy, EarthID, backs Jain’s comments and believes that Web3 developers building tools and services for the infrastructure layer aren't inhibited by geographical boundaries. He added that regulatory uncertainty and taxation will only have a “muted” impact on builders and creators building innovative solutions for the Web3 economy.
“Crypto exchanges in India have created an enabling ecosystem for the Web3 era by offering funding, advisory support, and forging alliances with educational bodies to build a talent pool to cater to Web3 development,” Chandra added.
On the other hand, Hitesh Malviya, founder of venture capital firm IBC Capital, pointed out that a lot of Web3 entrepreneurs operate from India but have registered their offices in a more favourable regulatory geography, such as Dubai, or countries with more regulatory clarity.
“They are afraid to register here because the regulatory clarity is not there yet and the taxation is very high,” Malviya said.
Similarly, Raj Kapoor, founder, India Blockchain Alliance, believes that there is still a lack of awareness about blockchain and cryptocurrencies in the country that has not been addressed. Meanwhile, the country is jumping on to training Web3 professionals, which “needs to be turned right on its head,” he said.
“Our education system is broken and most institutes are lagging when it comes to being in sync with industry 4.0. The academia-industry gap needs to be bridged. Web 3.0 is the future and needs to be part of our curriculum. Add the entrepreneurship edge to this and we have a steady stream of industry-ready resources for future jobs and startups,” Kapoor said.
He believes that Indian exchange CoinDCX could be a frontrunner in incubating the Web 3.0 work brigade.
Drawing a distinction
On the whole, the industry is of the view that cryptocurrency is different from blockchain technology and the government of India will continue to support Web3 development even if it thinks of banning cryptos.
“Crypto ban or not, blockchain is the real deal and Web 3.0 powered on the blockchain is the future of the internet,” Kapoor said.
Malviya adds: “Blockchain is something the RBI also supports and Web3 development will have a future in the country.”