Jack Dorsey co-founded Block, a financial services and digital payments company, is seeing a good mix of Bitcoin use cases in India, including long-term savings, remittances and adoption as a global currency, said a senior executive, marking the company’s foray in the country with its self-custody Bitcoin wallet, Bitkey.
This comes at a time when the Bitcoin prices are skyrocketing to its all-time highs through institutional investments and an upcoming Bitcoin halving event next month.
Block started shipping its hardware self-custody wallet Bitkey in India from March 13, along with 96 other countries. The device has been priced at Rs 12,710 and can be bought from Bitkey’s website.
A self-custody hardware wallet or a ‘cold’ wallet is a device where users can hold their crypto tokens safely outside the exchanges.
Speaking to Moneycontrol, Max Guise, Bitcoin Products Lead at Block said, “We see a really good mix of use cases in India. We are seeing both long term savings use cases, wherein people are buying and holding Bitcoin for long term stability and growth of it as a currency. And also people appreciating its value in an open economy as a global currency -- whether that's through remittances across borders, and so forth.”
“Overall, there’s just a really large population that really understands Bitcoin (in India). There's a lot of adoption, a lot of savviness. And it's just not common everywhere in the world. And it's one of the things that I'm really excited about in India in particular,” Guise added.
Block’s CEO Dorsey had announced the public beta testing of Bitkey back in June 2023, following which interested users had signed up to be a part of it across countries, including India.
Formerly known as Square, NYSE-listed Block was co-founded by Dorsey, former co-founder and CEO of Twitter (now X), and American billionaire businessman Jim McKelvey, in 2009. Block offers new-age financial services products across hardware, software and applications.
How Bitkey works
As a self-custody wallet, users can transfer and hold their bitcoin tokens securely in these hardware devices which are not really connected to the internet network and come with a set of recovery tools. In a way, Bitkey puts back the ownership of Bitcoins into the user’s control.
“Most people buy Bitcoin, often on an exchange, and they tend to leave it there. Here the exchange will actually hold the keys that control the Bitcoin. And that brings a number of risks for the users including mismanagement of funds. We've already seen that happening, most notably, the FTX collapse about 18 months ago,” said Guise.
Guise explained that with exchanges holding the tokens, there are always chances of it getting gambled away or lost on risky trades. Moreover, hackers largely target exchanges. Also, with exchanges in control of Bitcoin, they get to make the rules and impose barriers when the users want to withdraw them.
Scope of partnerships
Users will be able to move and hold their Bitcoin tokens using their phones and the wallet, directly through the Bitcoin network without needing a third party application or platform in between. This helps with users who are holding the token for the long term.
But for those who are moving the tokens constantly, either to make payments, pay bills or convert them into currency and for other transactional services, Bitkey has got into partnership with crypto exchange Coinbase and its in-house mobile payment service application, Cash App.
Bitkey will be exploring similar exchange-level partnerships locally as well. Guise said that Block is also exploring ways to make Bitkey available at retail stores over time.
Regulatory approvals
India is yet to have crypto regulations in place while crypto and virtual digital asset related companies are expected to be registered with the Financial Intelligence Unit- India (FIU-IND) under the Prevention of Money Laundering Act (PMLA).
When asked about this, Guise said that Bitkey is a hardware electronic device which doesn’t hold any customer’s money and works more like a tool.
“As a piece of hardware, it has all the regulatory licensing required, in place,” he said.
The company explained that Block has a specific team dedicated to working with governments and regulatory bodies all around the world. As a public company, it is required to adhere to regional and local regulations and the company has worked towards that and actively track evolving global cryptocurrency regulations.
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