New Delhi, Dec 8, 2018 : In the past 12 months, the market capitalization of the cryptocurrency universe has risen almost 600% to a staggering $2.4 trillion. As an asset class that is rapidly growing in popularity, there have been rapid developments on how to regulate the ecosystem.Prime Minister Narendra Modi presided over a high-level comprehensive meeting.
The Central government will introduce the long-awaited Cryptocurrency Regulation of Official Digital Currency Bill 2021 to Parliament during the Winter Session.
IANS spoke to Nischal Shetty, founder and CEO of WazirX, India’s largest cryptocurrency exchange.
He explained what attracts youth to crypto and the best practices investors should follow in terms safety, return expectations, and risk management.He also discussed how crypto exchanges are using Cloud technology to scale up and offer seamless experiences to their users.
Extracts from the interview
Q: India is home to the largest number of cryptocurrency-owning individuals in the world.What is it about cryptocurrency that has attracted so much interest in India in just a few years?
A: The number of crypto-holders has been growing year after year, according to the data.Since the pandemic, crypto has been gaining momentum globally.The ban on banking in India was also struck down by the Supreme Court of India at the same time.
This opened the door to crypto adoption in India.This has made it easier for people to learn about crypto and to explore other career options.WazirX’s trading volume has increased by more than 18,000% since the bank ban was reversed.
Q: The pandemic caused a surge of online gaming and retail participation in stock markets in India.Is crypto an asset class that has benefited from the increased knowledge about blockchain and cryptocurrency in the last 18 months?
A: Crypto adoption has increased in recent months due to pandemic-induced inflation.Bitcoin is becoming increasingly popular in hyperinflationary countries around the globe, including India.
Because bitcoin is pre-programmed, it has a limited supply, making it an excellent hedge to protect your fiat portfolio.As with gold, crypto’s inflation-beating properties are what make it a great hedge.
It has also helped increase awareness about crypto and blockchain with the addition of renowned players such as MicroStrategy and Grayscale, Square and Paypal.
Q: Given the recent price spike, is it possible to recommend that new investors start building their portfolios with a focus on risk management and return expectations?
A: First-time investors need to understand that crypto is not a quick-fix scheme.Bitcoin is an emerging asset class that should not be mistaken for a high-risk, high-reward investment choice.You should also be careful about which product you are using when investing in Bitcoin or other cryptocurrencies.I strongly recommend that you use a legitimate exchange that adheres to KYC and AML guidelines.It’s important to be aware of scams that promise quick riches or double your investment, as with any industry.
Q: Is there a lot of institutional interest in crypto trading desks globally? Is this a trend you expect to see in India?
A: We will see crypto mainstream faster than ever with more retail investors and first-timers entering the market.Retail participation is facilitated by regulatory clarity, which is one of the main drivers of institutional participation in cryptocurrency.
India has a lower institutional participation in crypto than the US and other countries.People are concerned about the risks associated with unregulated markets because of lack of clarity in regulatory regulations.
Indian crypto industry will benefit greatly from regulation.
The Blockchain and Crypto Assets Council (BACC), met with members of the Standing Committee on Finance.This conversation is a positive step forward.
Q: What can cloud technology do for you?
A: We don’t need to manage our data centers using cloud technology.A cloud technology eliminates the need to spend time or resources networking components within data centres.AWS is the most popular cloud provider and offers more services than other cloud providers.
AWS cloud-managed services allow us to easily spin databases, caches, and other services.
The crypto business is known for its spikes.
Sometimes spikes can be 10x during peak markets.We can scale our application to serve users with the help of AWS’s auto-scaling group, and our custom scaling policy.
Cloud allows for efficient use of resources.We can scale as needed and it’s great to have the AWS team help us understand our usage and assist in managing our resources efficiently.
There are also services that can help us keep our application latency low.We use dynamo DB to keep applications running at a low latency.
Finally, proper AWS Identity and Access Management policies, roles, and security groups on our VPC networks allowed us to isolate the environment.We can now audit our system with the AWS cloud trail service.
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