CoinSwitch, a cryptocurrency startup, apparently has plans to develop a stock trading platform. With this move, CoinSwitch would put itself in direct competition with existing trading platforms such as Zerodha, Groww, and Upstox.
According to a source that was quoted by ET, CoinSwitch has intentions of submitting an application to the Securities and Exchange Board of India (SEBI) for a stockbroker’s licence. It has also been reported that the firm is in discussion about offering fixed deposits with a number of non-banking financial companies (NBFCs) as well as banks.
In view of the recent difficulties that cryptocurrency has been having all over the globe, not just in India, the cryptocurrency trading platform recently made an announcement that it intends to provide traditional investment goods such as mutual funds, US equities, and other similar items in the near future.
For example, despite the fact that Bitcoin’s price has increased over the course of the past several months or so, it is still only half of what it was in November 2021. In terms of market size and value, other big cryptocurrencies have also been severely impacted by the bear market. The difficult situation for cryptocurrency trading platforms has been exacerbated by India’s stringent crypto legislation and taxes. As a result, they have been encouraged to broaden their fintech offerings into more mainstream goods and services.
However, due to the recent increase in tax collected at source (TCS) on overseas transfers made under the Liberalised Remittance Scheme (LRS), platforms that provide US equities have begun to shy away from the same. CoinSwitch is one such site.
The magazine quotes Ashish Singhal, the founder and CEO of the cryptocurrency trading platform, as claiming that the cryptocurrency platform intends to become a wealthtech platform and that there are various products currently in development for the site.
Further, Singhal was reported as adding, “We aim to grow alongside them by offering a diverse range of asset classes, including mutual funds, fixed deposits, and more.” We expect to make an announcement about these goods before the end of the current fiscal year.
Inc42 has reached out to CoinSwitch for comment on the current situation, and the article will be updated as soon as the firm replies to our inquiry.
The announcement of a stock trading platform comes close to nine months after CoinSwitch introduced CoinSwitch Pro, a multi-exchange trading platform that enables users to trade crypto assets in Indian Rupees across various exchanges with a single login. The news of the stock trading platform comes almost nine months after CoinSwitch released CoinSwitch Pro.
CoinSwitch seems to be gearing up to join a field that is already saturated with a large number of startup brokers and traditional brokers. There are a number of conventional fintechs, such as Paytm and PhonePe, that also provide stock trading on their own platforms. This has increased the level of competition in the sector.
Regardless of this, even these stock trading platforms have been having a difficult time lately as a result of the continued high volatility in the stock markets. For example, as of the end of March 2023, Upstox had about 2.8 million active users, despite having lost roughly the same number of members as it had in June 2022. During the same period, Zerodha had a loss of around 200,000 active users.
CoinSwitch is a worldwide aggregator of cryptocurrency exchanges. It was established in 2017 by Singhal, Govind Soni, and Vimal Sagar Tiwari. Coinbase Ventures and Andreessen Horowitz (a16z) are among the investors in this unicorn company. The initial funding for the company was close to $300 million, with the most recent funding coming in the form of a $260 million Series C unicorn round in October 2021.
