Recently, the Indian Supreme Court overturned the crypto ban imposed on the country’s banks by the Central Bank. Following this news, Binance is collaborating with WazirX, a local crypto exchange to invest $50 million in the nation’s crypto sector.
Details of the Investment
According to a recent blog post posted by Binance, they have pooled $50 million worth of the Binance USD stablecoin and WRX, the WazirX native token. With these coins, the two firms have set up a “Blockchain for India” fund, which will be given to blockchain startups in the country. WazirX was bought by Binance in 2019 in a deal that is estimated at $5 to $10 million.
According to the blog post, the fund is going to invest in startups that focus is on resolving social and industrial problems. Besides that, the startups have to promote sustainable development if India’s blockchain sector. According to a blog post by the CEO of WazirX, India’s tech talent pool is the largest in the world. With the fund, they hope to encourage more teams to join the blockchain ecosystem.
The fund is going to invest $100,000 to $5 million in company equity and tokens of the startups. Once a startup receives funding, it will also receive access to the global blockchain ecosystem of Binance. Besides that, they will receive mentorship from other founders and leaders working in this ecosystem.
Why Binance is investing in India
Recently, the Indian Supreme Court ruled that banks could handle funds from crypto firms. This was a reversal of a ban imposed by the country’s central bank. It was seen as a landmark decision for the Indian crypto sector. With the decision, it will allow millions of Indians to invest in the crypto sector.
However, the Indian central bank has vowed to appeal the ruling. While they have not taken any official steps to reverse the ruling, the central bank claims that allowing crypto firms to operate in India is a threat to the health of the banking industry. It also claims that crypto provides an easy way for people to launder money and finance terror. However, the Supreme Court was not convinced by these arguments in issuing its ruling. The petition by the central bank will likely fail.
Funding for Crypto Projects in the Bear Market
This fund by Binance represents an ongoing trend in the crypto market to fund projects operating in the sector. Another example is Bakkt, which recently announced it had completed in Series B funding round during which it raised $300 million. Companies such as M12, the Microsoft Venture Capital arm, Boston Consulting Group, and Intercontinental Exchange took part in the funding round. Another good example is Argent, an Ethereum wallet, which recently managed to raise $12 million in a Series A round.
It is quite clear that while the bear market is in full swing, many large venture capitalists believe in the long-term success of the crypto market. Otherwise, they would not be risking millions of dollars in the sector.
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