It’s easier and faster to buy bitcoin, ethereum, and dogecoin in India than it is to order pizza on the Zomato food delivery app. This is how startups attract the country’s next generation of investors and this is what is attracting India generation z towards the crypto world.
Take CoinSwitch Kuber, an exchange aggregator valued at $ 2 billion last month in a funding round led by Andreessen Horowitz, Sequoia and Coinbase, a cryptocurrency exchange listed at $ 67 billion in the United States. The app is a rising star among Generation Z in India: the average user is only 25 years old, more than a decade younger than their crypto trading counterparts in the United States. In addition, over 70% of its clients are investing in financial assets for the first time.
What’s new in this app?
Coin Switch requires users to upload basic identity information, share their tax number, and take a selfie, a process that takes five minutes, before allowing them to buy and sell over 80 different cryptocurrencies in transactions as small as 100 rupees, around $ 1.30. The app has accumulated 12 million users in about 18 months. Alongside rivals Coin DCX, Bitbns and Wazir X acquired by Binance, it spends the jackpot on advertising at major cricket tournaments.
It highlights the latest battleground for fintech users. Startups are joining a race against digital lenders and investment platforms, including Ant-backed Paytm, which is seeking a valuation of up to $ 18.5 billion in its initial public offering.
But while the challengers are smaller, the volatility of cryptocurrencies makes trading addicting. Users open their apps to check portfolio gains and losses more frequently than, say, a mutual fund investor. It’s a powerful way for CoinSwitch and others to potentially offer other regulated products like stocks and funds, potentially becoming the next big financial super-app.
Unlike China, which effectively banned the industry, India is more likely to regulate it rather than risk driving digital asset enthusiasts underground. An official attempt to crush cryptocurrencies was overturned by the highest court in March 2020. It is still possible that trading will be banned, but perhaps the most important immediate problem is simpler. Startups have made little effort to educate their users, so most don’t understand the high-risk, high-return characteristics of what they’re dealing with. That leaves a lot of room in India for some sort of big explosion and reaction.
Reuters with additional input by GVS