Dubai: Adoption of digital assets, both retail and institution, in India will only go up with more regulatory certainty around cryptocurrency, said SB Seker, head of APAC at cryptocurrency exchange Binance.
Indian institutions do not want to take up more digital assets as part of their portfolio because businesses are much more sensitive than retail participants, Seker said.
“I think the adoption institutionally will come when there’s regulatory certainty,” he said on the sidelines of an event hosted by Binance in Dubai. “Retail adoption, I think, will benefit from regulatory certainty. I don’t think they’re looking for regulatory certainty, but…consumer safeguards go hand in hand with the licensing framework,” he said. “So, if you’re stuck on an AML (anti-money laundering) registration only model, you don’t have much to offer by way of consumer protection, at least from a legislative perspective.”
Currently, cryptocurrency exchanges in India are required to comply with know your customer (KYC) and AML regulations. These exchanges are required to register with the Financial Intelligence Unit – India (FIU-IND) to ensure regulatory oversight for their operations.
According to Seker, the lack of proper regulations is also a reason why fund managers and wealth managers do not recommend cryptocurrency to their clients.
“If you look at fund managers in India, what they’re doing is completely opposite to what fund managers in the rest of the world are doing, who are actively promoting and increasingly advocating for crypto as a component of their portfolios,” he said.
Peer-to-peer (P2P) transactions, or offline or unorganised transactions in crypto are carried out due to lack of alternatives, Seker said.
“These things happen on the fringes because people don’t have options. So, that actually creates risk. The lack of regulatory certainty, and the lack of properly licensed pathways for people to participate in a marketplace, which is what an exchange is, leads to off-exchange shadow activities, which introduces risk to consumers and to the system,” he said.
A November multi-country survey by Binance suggested that for new-users, Ethereum, Binance Coin and Solana are emerging as popular altcoins. Nearly 50% of the respondents in the survey had identified themselves as long-term holders of cryptocurrency.
(The reporter was in Dubai at the invitation of Binance)
