Neil Banerjee
The surge in institutional investment is shaping a new era for India’s cryptocurrency market. SME Futures spoke to Sathvik Vishwanath to uncover the latest developments in cryptocurrency and their implications. From the rise of tailored institutional crypto products to the role of regulatory frameworks, this conversation sheds light on the opportunities and challenges shaping the crypto landscape in India.
Here are excerpts from the interview:
How has the recent surge in institutional investment impacted the Indian crypto market? What factors have contributed to this increased interest from traditional financial institutions?
The Indian bitcoin industry is undergoing a substantial transition as institutional investments flow in, increasing liquidity and legitimacy. This trend represents a shift towards widespread use, as cryptocurrency transitions from a speculative asset to a recognised financial tool. Key elements driving this trend include global success stories in crypto adoption, the rapid rise of decentralised finance (DeFi), and the growing acknowledgment of cryptocurrencies as a hedge against inflation.
Institutional-grade platforms, such as Fidelity’s crypto solutions and JPMorgan’s blockchain initiatives, have established a global standard, underlining the need for incorporating digital assets into traditional financial institutions. Inspired by these triumphs, Indian businesses are experimenting with blockchain-based innovations, researching tokenised assets, and introducing structured crypto investment products.
What are the primary institutional crypto products being offered in India? How are these products tailored to the specific needs of institutional investors?
Indian cryptocurrency exchanges are expanding to accommodate the growing demand from institutional investors by launching advanced, institutional-grade offerings. These include custody solutions, over the counter (OTC) trading, and staking services that are designed to assure strong security, smooth operations, and regulatory compliance. Such products are critical for establishing confidence and attracting large-scale participants who want high levels of transparency, scalability, and compliance.
For instance, Unocoin, one of India’s largest cryptocurrency platforms, provides API-driven trading solutions, secure multi-signature wallets, and compliance-ready tools designed specifically for institutional clients. These solutions improve operations for hedge funds, financial institutions, and businesses by assuring secure and efficient trading while reducing custody and compliance concerns.
By addressing fundamental challenges such as security and scalability, these solutions encourage broader institutional participation in the crypto space. This increased acceptance not only improves market liquidity, but it also strengthens the reputation of India’s cryptocurrency ecosystem, setting it up for long-term success.
What is the current regulatory landscape for institutional investors in India? What are the key challenges and opportunities presented by the regulatory environment?
India’s regulatory landscape for cryptocurrencies is still in its early stages, with the lack of defined legal frameworks providing barriers to widespread adoption. Despite this, developments such as G20 debates on global crypto legislation and the Reserve Bank of India’s (RBI) rising interest in blockchain technology point to positive prospects. These negotiations aim to establish a consistent global strategy to regulate digital assets, offering much-needed certainty to businesses and investors.
Uncertainties about taxation, regulatory requirements, and potential prohibitions on cryptocurrency activity are among the most significant challenges. However, these barriers create opportunities for innovation, enabling businesses to pioneer compliant cryptocurrency operations and establish industry-leading best practices. Businesses that address regulatory concerns ahead of time might position themselves as market trailblazers. The constant interaction between policymakers and industry stakeholders is critical to developing a balanced framework. This joint strategy will enable India to capitalise on blockchain’s revolutionary potential while maintaining strong investor safeguards and regulatory control.
How are institutional investors addressing security and risk management concerns in the crypto market? What role do exchanges like Unocoin play in mitigating these risks?
Institutional investors use sophisticated risk mitigation measures to protect their bitcoin investments, including insurance-backed custody solutions and AI-powered fraud detection systems. These procedures address important security and operational risks by assuring transaction integrity and asset protection. Indian exchanges like Unocoin supplement these efforts by providing strong security infrastructures such as end-to-end encryption, cold storage facilities, and stringent Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance standards.
These platforms provide a secure and trustworthy trading environment by integrating cutting-edge technology and regulatory compliance. This instils confidence in institutional players, resulting in more engagement in the Indian cryptocurrency industry.
