An uncertain policy environment and tanking consumer interest in cryptocurrencies has led to a flurry of shutdowns among India’s virtual currency exchanges. Cryptokart became the third such exchange to down shutters over the last year, with its founder Gaurang Poddar taking to social media to announce his decision to wind up operations.
Poddar pointed out that dwindling interest and lack of clear government regulations were among the major reasons for the decision. “We’ve decided to shutdown Cryptokart. While it is difficult, given the hard work we’ve put in, it has been a great experience and I’m glad to have gotten to work with such a talented and passionate team, and proud of the platform we’ve built,” Poddar said in his Linkedin post, adding that the “general interest in crypto in India has tanked. And the government isn’t going to introduce any regulation and leave it grey for a while”.
Cryptokart’s shutdown comes after two of India’s largest cryptocurrency exchanges closed operations. Zebpay, which decided to leave the market late last year, and Coinex, which shut shop this summer, also cited the uncertain policy stance and declining interest among consumers as reasons for the shutdown. Other players like Coindelta and Coinome have also closed.
The deathblow for these exchanges came as early as last year, when the Reserve Bank of India banned banks and other entities it regulates from dealing in virtual currency transactions. This, according to Koinex, had led to difficulties in their operations including denials in payment services from payment gateways and banks.
The unfriendly policy environment has also led to investments drying up. According to IT industry body Nasscom, investments from venture capital firms and initial coin offerings in India’s blockchain and cryptocurrency sector has been extremely low due to the lack of regulatory clarity. So far, the segment has received just $8.5 million in funding, less that 0.2 per cent of the global total.
The future does not look any brighter for the segment, since India’s policy apparatus seems disinclined to offer such entities free reign. In fact, Union Minister Anurag Thakur reiterated earlier this month that cryptocurrencies are not recognised as legal tenders and the government was still mulling whether trading in them should be allowed.