Ryan Sungho Kim, co-founder and partner of Hashed, a South Korean web3 venture capital firm, has said though India’s blockchain and web3 space is at a nascent stage, the country will eventually pick up as major economies, including the US, Europe and Japan, are turning pro-crypto.
Kim’s comments come at a time when the US President Donald Trump after taking office on January 20 banned the creation and issuance of the central bank digital currency (CBDC). Trump, however, has been vocal in his support for crypto.
“The US government, after Trump won, turned pro-crypto. Japan is pro-crypto and so is Europe. Even in Russia Vladmir Putin has been talking about bitcoin going up. How can India get off this trend? They will follow eventually,” Kim told Moneycontrol.
Indian founders have to prepare to compete with the global companies because the blockchains and blockchain networks are going to be global. So all economies will be connected, he said.
“I know the Indian government has been very negative about crypto but they have a let a lot of founders do the crypto business here. So, Korea was also the same a few years earlier but they too didn’t stop innovators to make good products in the industry. Governments are concerned about digital assets causing scams, fraud and money laundering,” he added.
Kim also aligned with the government’s stand that crypto and blockchain regulations should be global as the network itself will be global.
Hashed has an India and emerging markets-focused arm called Hashed Emergent, which has invested in several web3 startups across sectors and use cases, including gaming tools firm Lysto, crypto infrastructure company Liminal and Mayhem Studios, in India. Web3 is a newer concept of the internet or the world wide web which involves decentralisation, blockchain technologies and token economics.
According to Kim, the Indian web3 ecosystem is still at a very early stage but he expects a “global winner” to come out of the country within the next few years.
“There are so many unicorns and very talented founders in the Web2 space (in India). But once just one or two in web 3, for instance, Polygon already is successful... once more such successful cases come out, then I think top founders will jump into crypto,” he said.
“The products in India are not breaking the global levels of the product yet but over time, I think that the quality will go up to a global level.”
Not just startups, in India, tech companies, too, have started experimenting with web3 tools and opportunities. Recently, Reliance Jio partnered with Polygon Labs to introduce Web3 and blockchain technologies to its platform.
Gaming company Nazara Technologies, too, ventured into web3 space in partnership with Lysto.
Crypto bull run changing VC sentiments
Kim said some regions including Dubai, Abu Dhabi and Hong Kong have quickly moved to attract crypto and web3 funds and startups.
In November 2024, Hong Kong proposed to waive tax on investment gains from cryptocurrencies and other alternative assets for hedge funds, private equity funds and certain family offices.
Dubai has a dedicated regulator for digital assets called the Virtual Assets Regulatory Authority (VARA), promoting more startups and venture capital funds to set up shops in the city.
Now, with Trump’s victory, the “whole macro is going up”, Kim said.
“From a VC perspective, some of the web2 VCs are also preparing web3 funds separately. The sentiments are changing a little bit. Like every bull market, the traditional pension funds, or the big sovereign funds too are all willing to invest in a crypto fund. They now want some amount of exposure to the sector – at least 1-5 percent of their portfolio,” he added.
In December, Hashed Emergent launched India’s Web3 Landscape 2024 report. According to the report, the first nine months of 2024 saw funding activity into web3 startups grow by 82 percent YoY to $462 million. This, however, was still lower than the $1.4 billion raised in 2022.
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