Nischal Shetty has made a name for himself in India.
In the first half of 2021 alone, its crypto business grew more than 12-fold and became the largest digital currency exchange in the country. And now he’s set his sights on making WazirX India’s first billion-dollar crypto unicorn.
But while Shetty is a tech entrepreneur through and through, the millennial’s foray into cryptocurrency was originally inspired by a rebellion against Big Tech.
“There is always a reason why someone gets into crypto,” Shetty told CNBC Make It.
Starting with social media
Shetty is the 36-year-old co-founder and CEO of WazirX, a cryptocurrency platform that allows users to buy, sell and trade popular virtual coins such as Bitcoin, Ethereum, Litecoin and Ripple’s XRP.
Founded in 2018 with co-founders Sameer Mhatre and Siddharth Menon, the company has benefited from the rising tide of retailers investing in cryptocurrencies.
Less than two years after launching, it was acquired by Binance, the world’s largest crypto exchange. Then in April, the crypto token WRX temporarily reached a billion-dollar valuation.
But the trio’s journey initially began with a social media company.
There was a huge gap between how international stock exchanges worked and how Indian stock exchanges worked.
Nischal Shetty
Co-founder and CEO, WazirX
“My first startup was all about social media management. If you had your Twitter account or your Instagram account, you could manage it from a single place,” said Shetty, who started his first company in 2010, soon after completing his computer science diploma.
The idea that was later called Crowdfire came up. But soon the social media giants became more restrictive with their APIs – or application programming interfaces – making it harder for third-party developers to build businesses. Shetty and his co-founders decided it was time to change tact.
“We had to cut some features that were generating revenue for us, but these networks didn’t think they were the right features,” Shetty said.
“That led me to the whole decentralized ecosystem,” he continued, referring to blockchain – a distributed database that is not controlled by a single party or company.
Getting started with cryptocurrency
Its timing coincided with a boon for cryptocurrencies and Bitcoin in particular. And in 2018, Shetty and his co-founders decided to use their technical expertise to create a blockchain-based crypto trading platform.
“I realized that there was a big gap between how international exchanges worked and how Indian exchanges worked,” he continued. “With that, we decided that we should build an exchange focused on the Indian ecosystem.”
We have acquired more users in the last four, five months than in the last three years.
Nischal Shetty
Co-founder and CEO, WazirX
However, weeks after the launch, the Reserve Bank of India imposed a ban on crypto-related payments. WazirX had to quickly pivot and act as a third-party administrator between buyers and sellers.
The change paid off and the following year, in November 2019, WazirX was acquired by Binance, the world’s largest cryptocurrency exchange, as it made its first foray into the Indian market.
Experience a meteoric rise
WazirX today says its registered users quadrupled to 6.5 million in the second quarter of 2021, while trading volume reached $6.2 billion in June.
“We have acquired more users in the last four, five months than in the last three years. The growth has been so fast,” said Shetty.
Cryptocurrencies have enjoyed a meteoric rise in 2021, reaching a total market cap of over $2.5 trillion in May. It has since fallen to about $1.5 trillion, according to CoinMarketCap. Much of this year’s increase can be attributed to increased demand from retail and institutional investors.
“There is a novelty and a fad associated with this, and that is quite enticing for investors,” said Ganesh Vasudevan, director of research at IDC Financial Insights. “Then there is also a convenience associated with it. The exchange platforms released with the applications appear to be extremely practical and extremely efficient.”
They are under pressure from the authorities
Still, the crypto industry is under increasing pressure internationally as authorities raise concerns that it could support tax evasion and criminal activity.
In June, WazirX owner Binance was banned from any regulated activity in the UK. This was the latest sign of a growing crackdown on the global cryptocurrency market.
WazirX, in turn, was caught in the middle of an ongoing crypto debate among Indian authorities, prompting Shetty to join forces with other exchanges to collectively engage the country’s top financial decision-makers.
They are unsure how to handle this asset – be it a currency, a commodity or another asset category.
Ganesh Vasudevan
Research Director, IDC Financial Insights
An opportunity for India’s techies
Still, Shetty says the industry has a lot of scope to empower people in countries like his own.
In June, WazirX became South Asia’s first marketplace for non-fungible tokens (NFTs) to help creators across India trade digital assets such as artwork and music. NFTs are digital assets tracked on blockchain networks that provide proof that someone owns a unique virtual item.
“If you look at the history of India, software has been one of the main reasons for our rapid economic progress. Now if you look at crypto, crypto is an extension of the entire software ecosystem, so India is very clear that we cannot miss this opportunity,” he said.
Given all this, the future path for WazirX – and cryptocurrencies in general – will be bumpy. But after the ups and downs Shetty has endured in the last few years, he said he is ready for an exciting ride.
“Our mission has been to make crypto accessible to everyone in India and I think we are still very early days,” he said. “I believe India has the potential to attract 100 million people to crypto and our journey has just begun.”
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