Singapore-based virtual currency exchange Coinstore has begun operations in India at a time when the government is preparing legislation to effectively bar most private cryptocurrencies.
Coinstore has launched its web and app platform and plans branches in Bangalore, New Delhi and Mumbai which will act as its base in India for future expansion, its management said.
“With nearly a quarter of our total active users coming from India, it made sense for us to expand into the market,” Charles Tan, head of marketing at Coinstore told Reuters.
Asked why Coinstore was launching India despite the pending clampdown on cryptocurrencies, Mr Tan said, “there have been policy flip-flops but we hope things are going to be positive and we are optimistic that the Indian government will come out with a healthy framework for cryptocurrencies.”
Government is planning to discourage trading in cryptocurrencies by imposing hefty capital gains and other taxes, two sources told Reuters earlier this month.
It has said that it will allow only certain cryptocurrencies to promote the underlying technology and its uses, according to a legislative agenda for the winter session that is set to start later this month.
Mr Tan said Coinstore plans to recruit about 100 employees in India and spend $20 million for marketing, hiring and development of crypto-related products and services for the Indian market.
Coinstore is the second global exchange to enter India in recent months, following in the footsteps of CrossTower which launched its local unit in September.
The price of the world’s biggest cryptocurrency, Bitcoin, has more than doubled since the start of this year, attracting hordes of Indian investors.
Industry estimates suggest there are 15 million to 20 million crypto investors in India, with total crypto holdings of around 400 billion rupees ($5.33 billion).
Coinstore also plans to expand into Japan, Korea, Indonesian and Vietnam, according to Mr Tan.