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Sunday, September 25, 2022

WazirX CEO interview

All right, so we continue to dive into crypto exchanges that are really kind of changing the game. Obviously, we’ve been following a lot of what binance has been doing you, you name. It we’ve seen all sorts of different platforms that have really started to excel from voyager all the way over to coinbase and their ipo. Today we thought, let’s get a little bit deeper into more of the global aspect of how exchanges are operating and joining me today is one of the founders and co-founders of a platform called with xerics. You may know them if you’re an indian watcher of our channel right now.

That’S a company that has really kind of evolved very quickly, so joining us today is their ceo and uh michelle great to have you on the show, hey thanks for having me here all right. So i want to. I want to learn a little bit about uh wazirex was uh, mainly kind of how you guys got launched. What was the process? What’S the team look like there kind of give me the the sit rep on how you guys have come to life.

Sure um, the the idea, really you know, uh came into effect. It was the end of 2017 and uh. The the reason why i decided to do this was uh from a pain point. I had it at uh back in 2017 uh. While there were quite a few crypto exchanges in india, um when i was trying to buy bitcoin and 2017 was when there was a massive bull run uh.

It took me about a week to buy my first bitcoin and and by the time i bought this, and this was towards i think, october and november, when the prices were uh climbing up every other day, uh. The prices had already increased by the time i bought my first bitcoin and, and that experience left me wanting more and uh. Then i you know just being an entrepreneur. I was running a different company. I just started doing some more research into understanding.

Was i the only one facing this problem or was this more india wide issue, and i realized that uh there was. There were a ton of people who are facing the same issue. So then, i started ideating this with my co-founders uh rest of my team, and we decided that you know it would be uh really amazing if we could build this for india, where uh buying your first bitcoin should be very quick, easy and uh. You know fast for anyone to do uh with that we set out and we eventually launched it in 2018 on march 28th, and that was when we launched the exchange. So it’s been about three years now and today we are the largest crypto exchange in india uh.

One of the fastest growing we have over seven million customers on the platform today, so seven million customers. This could have a real uh, really a big impact uh in the evolution of cryptocurrency. When you see exchanges like this, especially in a country like india, which is one very forward-thinking, uh advanced from a technology standpoint, you know the population there very well educated. You know so. The opportunity for india is massive, especially in this kind of early adoption stage of cryptocurrency, and also the exchanges and and the process of going through, setting up an account getting onto the platform understanding how all this thing, all these things work uh talk to me a Little bit about uh, the reserve bank of india and their ban kind of the whole process that came into play and how that affected your platform and kind of its future yeah.

That was pretty uh interesting because the timing was uh. You know when we launched in march 2018 – and i think three weeks after that, the the banking ban was announced and uh we had three months to either. You know i mean we were going to lose our bank account in three months. So so here we were a brand new uh startup, just three weeks in and you’re hearing this um. What was happening around that time because of this restriction or banking ban, was a lot of the incumbents, the ones who were there for a long time they started deciding either to shut down or to leave the country and start somewhere else.

We decided that while there’s a banking ban, it’s not illegal to trade in india uh in crypto or it was not illegal to hold crypto. So why not devise a solution where we could still operate without having a bank account? That’S where we built appear to be an uh. You know a sort of way for people to buy and sell crypto and uh that sort of became our uh. I would say a stepping stone into growth, because uh here we were brand new in exchange.

Just launching, and then we had this amazing solution that uh people in india and at after the bank ban came in. This was probably the first option available, so everyone jumped into the exchange and that’s what set our growth from there. So really kind of it was a blessing in disguise in the sense of just being able to adapt kind of apply. Some engineering and move into kind of a new model for what was rex would be eventually rolled out into i’m kind of curious. When you look at the uh, the total addressable market there, at least in india, 7.

million or i think is – is your customer count right now? What do you think the market potential is in india for cryptocurrency and say the next five years in terms of customer count, so as on today, we have about, i think, uh 17 to 18 million customers in india, who i i mean the potential target where we Have seven million of them, but that’s the market, size and uh? If you look at the growth i think about three years ago we had about three to four million people in india who are into crypto, so it’s grown about 3x and uh. You know i would. I would still say that this happened during the the the bear market of 2018 2019 and the good phase of 2020 2021 uh, the next four three to five years.

I think this is going to accelerate even further, and i won’t be surprised if india crosses about uh 70 to 80 million and maybe 100 million on the on the you know more positive side but 70 to 80 is a more conservative number that i believe india Will definitely hit a few reasons, the top most being that india is a country of a lot of young people and uh like, for example, our data itself. We have about uh 65 of our 7 million customers are below the age of 35 and that’s a large demographic in india. So i won’t be surprised 70 to 80 million uh customers. Do you feel like that? Uh?

You know kind of that uptake in terms of customer growth would happen. I guess in two things, because we we have two markets that are kind of evolving one right now some people still speculate. This is the end of a bull run that we’re still in that’s one of our speculations that could roll into those typical bear markets, which i still am a little bit curious as to whether or not we’re going to see a bear market. This time around. Obviously, we’ll see one with bitcoin just because of the availability and the price access price movement, but with a lot of the other um, you know, platforms, protocols, the nft products, the d5 projects that are out there, and then you have just so many different tokens that Are being traded that really don’t have a lot of uh bearing on something that is, you know a proof of work.

You know model like what bitcoin is on. Do you feel like this is going to give you guys an opening or a window to really kind of accelerate your growth on into the next bull run? You know 2023 and 24. Absolutely, and in fact i think, uh you brought up a good point. You know 2017, compare that to this time around.

You have a lot more, i would say: diversification in the whole crypto ecosystem and nfps are a large part of that, and what we are seeing is it’s still very early days of nfps, but nfp will lead to even greater adoption. I believe compared to, let’s say traditional crypto, because crypto was confined to people who were into finance and investments and if he sort of opens up the market uh, where you know you’re coming in for the art you’re coming in, to support a lot of artists that You believe in or you’re just coming for consumption of these media that is being sold. So so i think the next three to five years is uh sort of going to be where whether it’s a bull market or a bear, i think the adoption curve is going to go up where the number of new people coming in is just going to bubble Up and keep growing, i believe, yeah, i think that’s that’s! Our argument is that the evolution – and you know you get to a critical mass point of adoption at some point in the stage, and i think we’re very close to that now, because one mainstream media has really picked it up. Obviously, channels like ours and many others have really started to roll up and we’re seeing just ridiculous growth on these kinds of of consumption, of content, mostly around the education side.

So getting education from guys like you and understanding what the markets are doing internationally is very important. So i do think that we are going to see a quite a different model in terms of our growth, which really kind of puts you guys in a perfect position, because you’ve got the right kind of audience in terms of age, demographic interest, education, all those kind Of things you guys could be like, though, maybe in the top five exchanges in the world within the next few years, how will you be able to – and i guess are you going to look at – maybe expanding outside of your core indian market? There uh. I would never say never, but i think there’s just so, like you rightly said, there’s so much of potential in india right now and you know i. I do believe that that whole hockey stuff uh hockey stick growth.

That you know is possible. I think we are probably at that inflection point where this might really uh take off in india, and i think uh focusing on the indian market is important and we have quite a few work ahead of us uh. You know it’s not a smooth road because uh the number one is regulation. While we won the case against the rbi ban in 2020, but i think there’s still a lot of regulatory uncertainty in the country. So so you know clearing that then the education and that there’s still a lot of myths, but fortunately the media has come to understand a lot of this whole ecosystem.

So we are seeing some good uh, i would say, educational uh materials coming out in the media, but there’s still a ton of potential in the country. So i wouldn’t want to venture out right now and just focus – and you know just double down on this market. Do you see this? As i mean, if you look at this and when you think about your roadmap, and you say: okay, these are the challenges that we need to overcome in the next. You know two years three years.

Regulatory issues, obviously, is is one, but i feel like india has has seemed to have opened up a little bit in terms of one understanding, uh cryptocurrency and in general, just digital assets. Do you feel like there is a little bit more open water there in india? In terms of of accepting of where this protocol is going look, i think india is traditionally a software nation. If you look at our 10 last 10, 15 years of growth, software has been the reason. So while there exists myths and misunderstanding around crypto, i think the general consensus is that india will adopt this rather than stay away, because india understands that the rest of the world is already competing in crypto and we cannot stay away from it um now how what Direction and what what would be the process for that?

I think that is unclear will. Will it be a straightforward path to regulation, or will there be a lot of uh back and forth, but the good thing is this year we’ve heard some good statement like our finance minister, for example. She said that india will take a calibrated approach towards regulation. So that’s a good sign and i think, over the over the next few months we’re going to see much more clarity, around regulations which will push adoption in india to a large extent yeah for sure, okay. So let’s talk about binance uh binance, of course, has been in the news.

You know. Almost every headline seems like every day one country is dealing with it. I know cz is working on a new executive team to try to roll out. How did the binance acquisition come about? What was the process and how does it affect you guys in terms of your growth, so this happened uh in 2019 way beyond before you know the whole crypto came into the limelight.

I think 2019 was when we were growing, but not at this crazy pace and uh. We were looking for funding uh next uh fundraise and that’s when i came across the folks at binance and uh. I realized like why we could raise funds from them, but i was always amazed at the kind of uh speed at which they’ve grown and they’ve scaled, and i wanted to experience that and uh when we discussed we realized our mission was similar. Binance wants to make sure that uh they can spread adoption of crypto around the world and our mission is to uh ensure that we can get crypto adopted in india, so we sort of aligned which led which led to this whole acquisition. And after that, we’ve learned a lot.

We i’ve got the opportunity to understand close closely on how binance operates and how do they grow so quickly, and i could you know inculcate some of those changes into our exchange in india and that’s worked out well for us. Let’S talk about your token uh quickly, i mean we see a lot of exchanges that have moved into uh. You know token offerings and we’ve seen very successful ones. Some that have kind of gone over kind of somewhat lukewarm explain the reason what the purpose of uh, i think, what is it? Uh, wrx, okay, wrx, the purpose of that i don’t own the full full disclosure.

I don’t want to own it. So i’m kind of curious uh. What was the purpose of it kind of? How are you guys utilizing it in terms of a use case? Sure uh?

I think you’re right right now. A lot of exchanges have it, but back in 2018, when we were launching uh, the objective was. I look at crypto and i realized that every product that’s going to be built on crypto. Has this advantage over the other non-crypto products? Is you can have these tokens and you can distribute it to your early customers, your users, to sort of get them to be a part of your product?

You know this is a deeper. I would say a way for you to involve your audience and uh. We made sure we could do that, so we launched our token even before we launched the exchange as an airdrop program where, if you were an early adopter, you could get it and then slowly we’ve been building use cases, uh use cases ranging from getting discounts on Trading getting early air drops of new tokens that list on our exchange to now, we’ve uh just launched our nft platform, which is decentralized where you can use a token to purchase nfps we’re also going to launch a decentralized exchange where you can then use this token. As well, so the idea is to keep building an ecosystem around it, but the initial reason was: we wanted to involve our user base, our community with us, and that’s how we really launched this all right, miss charles okay. So i like it, i like that aspect of being able to utilize it.

You know as a vehicle for growth and definitely on the idea of rewarding your top users. Things of that nature. I want to talk about this uh kind of this shift. We’Ve seen in the ecosystem of i don’t, i won’t call it a workplace shift, but around the world. Obviously, with what’s happened in the last two years, people are just using utilizing um, digital and online services in a completely new way.

Obviously cryptocurrency has become somewhat of an income generating you know much like day trading, i mean, if you think, about how the day trading, uh era kind of exploded. I almost look at where cryptocurrency is happening right now, around swing trading and things of that nature. What are your thoughts on that? Because uh india has a lot of very innovative people? Entrepreneurial?

You know, they’re, probably looking at 15 ways to make money and cryptocurrency is definitely in the bullseye of those. Do you feel like this trend is going to continue on or do you think we’ll see a top end on this right? Now? I think it’s going to it’s just getting started. You know the first most important thing about crypto.

If you think about it, it’s 24×7. You know what what does that mean? Is i don’t have to quit my job to be involved uh. I might have a lot of free time early in the morning or late in the night and – and you know a lot of people – they sleep late, so they they look at this as that extra income stream, without sort of compromising on your existing income. And that’s a great uh, i would say advantage that crypto has to offer uh.

The second most important thing is what we’ve seen in this whole uh the whole pandemic is people have a lot of free time on their hands because they’re sitting at home, uh working from home – and you know, you’ve – got nothing else to do so. People are trying to learn new subjects and crypto happens to be one of those top ones. Why? Because it’s a it’s a discussion everywhere in every home, everyone wants to learn about crypto. Everyone wants to talk about it, so that has pushed a lot of people in india to learn, crypto and and then they naturally just progress to investments.

So i think it’s just getting started and i believe uh. You know this is going to be one of those which uh, while it’s a financial instrument, it’s going to be in the hands of maximum people, not like a niche where uh you know only those who understand it are going to get into it. I think everyone wants to learn about it. Everyone wants to be educated, it’s more like the internet rather than, i would say, the financial instruments that exist. I think you you hit on something very interesting too, that we’ve noticed just around i’ve been studying, uh internet uh consumer adoption over the last few decades and just kind of why technology seems to kind of migrate certain.

I won’t call them certain age, demographics, but to an extent, even though gen x and in maybe even to a certain extent, some of the gen like the boomers when we look at the u.s population. But i see a global adoption of crypto much like what you’re talking about, and it is a very interesting topic that has been somewhat addictive. Almost like gaming, combined with the internet combined with finance and you’ve, got a whole new process of how cryptocurrency is exploding around the world, which i think is, is going to be a continued. You know uh movement, but you guys are doing something that is kind of unique, which i think more and more.

You know platforms should be doing in that and that is going to the educational side. So i know you guys have a a tv show there in india that you are doing crypto education, you’re doing webinars things of that nature? How successful has that been for you, and are you guys planning on growing that? Where are you guys going with that one? It’S i think it’s been really successful and uh.

You know when i when i say success. I don’t really mean it by saying that you know it’s given us so much of trading volumes or sign-ups. I think it’s been successful and if you look at uh the crypto community in india, the the growth of the community, the growth of the ecosystem, the kind of uh information it has been able to pass on the right information busting of myths. A lot of confusion existed around crypto in india and we decided that instead of just focusing on let’s say, user acquisition and uh, you know our trading volumes. We could focus on ecosystem building.

So that’s what we’ve been doing and the good thing is when you focus a lot on ecosystem building, your companies automatically benefit because the market gets more educated. The market understands what are the right kind of products to use. So we focus on that and that’s worked beautifully and we intend to double down on it yeah i’ll i like to see it. I think this is going to be the future of crypto, because we’re going to have probably about a decade of of time here that we need to educate. You know several hundred millions of people in kind of this evolution and then it’s going to kind of move out from there, but i think obviously it’s a it’s an ever-changing ecosystem in terms of technology, if you just look at nfts their late entry onto the market And people trying to understand how nfts work now i understand you guys are doing into or going into some alternative alternative platform aspects and services.

How does uh nfts? How is that going to roll out on your platform? How are you guys doing an otc, and also a dex kind of talk to me about some of those other products? Sure i think uh, the the first, the nfp? The reason why we got into that is uh.

India has a ton of uh influences, um lots of them, and they have that each of them has their own set of followers and – and we see nft as that amazing extension to an education program – and you know one where you don’t have to be the only One educating, but each of these influencers – you just you know, get them to understand: nfps crypto. They automatically then disperse this learning to their set of followers online, and i think this is going to be that massive educational drive where nft is just a medium for people to understand and get into crypto and then from there. I think people can just self learn. So so i we look at nfp as an initiation program for a wide variety of people who otherwise would not be interested in, let’s take, for example, financial education, but because this is nft, it’s so much fun. They want to learn about it uh.

The second part was the decentralized exchange, so we are going to launch a decent class exchange and a lot of times. I get the question you have a centralized exchange. Where do you want to go decentralize as well uh? The the reason is, we want to build what our customers ask for, and we saw that there’s a percentage of our users who did not want to sort of you know, use a centralized exchange and lose custody of their assets, and i believe, as an exchange, we Should just provide all the features and all the options that our users need and uh that’s why we got into this whole decent life? Now, what happens is you want to have a self-custodial uh solution?

You can use our dex. If you want a custodial solution, you can use our centralized xt, so you have the best of both worlds as a customer and that’s what i think we believe in in crypto, it’s all about giving customers more power and that’s how this dex came about. Yeah. I see uh especially on the nft side, with india being a potential huge market for that. If you just think about just the creatives that are happening in and around india top youtube channel in the world, t-series based in india, really, you know focused on that market.

What a great opportunity that would be for creators to really kind of ramp into nfts! Are you working with any nft companies or nft projects, or are you maybe even looking at getting into nft projects yourself, so we’re working with a lot of them right from individuals? To you know companies, for example. We just partnered with sunburn, which is a you know. It’S it’s a festival that runs uh all year round and uh.

They dropped some really amazing nfps. We’Re also talking to quite a few uh art galleries. They want to try and uh see if they can tokenize their uh physical art into an nft. We are talking to some music uh uh producers to see if they can monetize and uh create their audio files into an nfp. So there’s a lot of work going on.

It’S still, i think early days. So you get all kinds of ideas, but we are starting slow and steady. We started with images. We are now just going into uh, video and audio, and i think from there we will just understand and uh. You know work towards it.

Also. Our platform today is sort of curated, so we haven’t yet opened it up to everyone, because we want to build that ecosystem in the right way and then we’ll open it up slowly to all the different artists in the country. I like it michelle. I want to talk about uh last topic here and that is kind of the trends that are going to help this critical mass take place. You know here in the u.

we see a lot of institutional finance moving into the market, a lot of uh potential, bitcoin etfs that are, you know at play. Right now. We’Ve got many of them. I think last count seven or eight. Now that are trying to vie for sec approval, at least here in the?

U S, what are your thoughts around? What’S going to be required for us to see this next level of critical mass adoption uh? I think, at least for india, some some sort of a regulatory clarity uh where you know – and i don’t mean regulation because that’s going to take a long time, but i think some guidelines or some sort of a dialogue that starts with the regulators and the government In the in the country, that’s going to bring in a lot of confidence in the investors and push them in the right direction in parallel as an industry, we’re already working on a self-regulatory body where we intend to sort of you know, get together all the exchanges And ensure that we are following some guidelines on our own before the government, even steps in so that’s that’s one direction. I think the other is education, purely education. I cannot stress enough that a lot of people stay away just because of misconceptions and myths around crypto uh.

Like the other day, i was just talking to someone and they said that uh i heard that you know you could lose your uh crypto overnight, because someone can hack into it now you know, then you realize that there’s so much of education to be done and Out there for people to understand this uh, it’s a lot like the early days of the internet. Uh. To be honest, i think the first time i tried to buy something on the internet that that product never reached me, and i thought the internet was a scam and i’m talking about this about um. You know when i, i think 2000, the year 2000 or 2001 So we’ve gone from there to today. I’Ve survived a pandemic because i could order everything online.

So so that’s that’s the that’s the part that we see for uh crypto as well, where we are in the education part and the more we can spread the right information. I think more faster, we’ll see that option. So i think these are the one one or two: the regulation education are going to be the key factors for the next phase of growth. Yeah, there’s a lot of movement on the cbdc side of things. We’Ve seen uh the euro digital dollar move into position where it’s starting to do some tests.

Obviously, the digital yuan is already pretty much launched in china. Any plans that you’re, seeing or watching in india that could really kind of change the ecosystem from the traditional fiat to a digital currency and how that might affect cryptocurrency in general in india. What are your thoughts on that so uh? The rbi in india just spoke about that uh where they said that they’re exploring cbdc’s, and i think it won’t be long before they get really deep into it. Uh i see that as a win-win for one uh, the awareness and education that you know it just gets better uh.

The second is the whole uh, i would say: there’s a large unbanked population in india and all of these people. They may not have a bank account, but they have mobile phones and internet. So what happens is the moment you have a cbdc. All of these unbanked get involved in the digital economy, and that’s an amazing thing for a country like india or any other nation, where they’re trying to get people onto the digital economy um. I think the third is uh, there’s also this whole uh.

You know the. I would say the back end of banks where the settlement becomes instant uh as against today, where sometimes i don’t know uh, at least in india. We experience that, if there’s an issue with your uh money transfer, your money can get stuck in limbo. Uh, your your bank and the other bank have some settlement issues that disappears the moment you get a cbdc, so i think net net, it’s going to be a big win and it’s going to just grow the market uh and and we’re really looking forward to india Participating and bringing up the whole cbdc for itself yeah. I i just see that, as i agree with you, i think it is going to be a win-win when we do see a digital currency kind of move into place, and we’ve talked about this on the show.

A lot about kind of the unbanked population, i’m thinking on that on a global stage. I mean we’re talking, especially in the third. You know, i won’t call them third world developing countries that are out there. If you look at south america uh some countries in the middle east, i mean that have really got an opportunity here to kind of move into this next era, especially if we get a a world digital currency, potentially there or even to some some point of a Reserve currency that could go uh to an e-wallet will be very interesting to watch uh nishchals shetty great to have you on the show thanks so much for stopping in. We appreciate your time thanks thanks a lot for having me on the show paul excellent.

All right. You guys are listening in over on the uh pod right now and, of course you, the number one thing you can do, of course is: give us some stars and also some feedback. That’S how we get some uh impact or some input from you, because sometimes i know we do have a lot of podcast listeners, especially on spotify. It’S one of our biggest uh downloads. For this show, you can also you spotify listeners can jump over to youtube right now and, of course, just search paul barron network and you’ll find this show and many others that we’re doing the number one thing you can do on youtube for us, though, is subscribe, And, of course, like the video and share it to a colleague because, as nichelle mentioned, education is going to be really key here in being able to expand the next era of where cryptocurrency and digital assets are going to move.

So very important shows like ours and many others out there that are doing, hopefully the work on kind of that process of bringing news and education to you on the user. If you have an idea for a show, you can shoot that to me. Just hit me up on twitter, it’s at paul, barron and i’ll catch. You next time right here on techpath, [, Music ], you

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