Binance, the exchange, invests $50 million in India. Can the Indian IEO concept revive the market?

In early March, after the Supreme Court of India overturned the ban on cryptocurrency trading imposed by the Reserve Bank of India, the world's second-most populous country with 1.339 billion people once again sparked expectations in the cryptocurrency community regarding the market. Leading cryptocurrency exchange Binance announced today (17th) that it will be launching a $50 million fund to invest in blockchain startups in India.

Expanding into the Indian Market with WazirX

The cryptocurrency exchange Binance acquired its Indian counterpart, WazirX, in 2019. In February, Binance successfully conducted an Initial Exchange Offering (IEO) for WazirX on its platform, with the token used for fundraising being BNB (Binance Coin), which has since appreciated at least nine times (the fundraising price was 1 WRX = 0.00108401 BNB, and the current price is 0.0099 BNB).

On the 17th, Binance and WazirX jointly announced the establishment of a $50 million fund to invest in startups or projects in India that utilize blockchain technology to address industrial and social issues, with investment amounts ranging from $100,000 to $5 million. This fund is not denominated in fiat currency but based on BNB, Binance's stablecoin BUSD, and WazirX's platform token WRX.

According to the official announcement, eligible Indian blockchain startups can directly participate in Binance's ecosystem, including the Launchpad platform for conducting IEOs. This indicates that, leveraging India's demographic dividend, there may be a resurgence in Launchpad activity through the Indian system.

Binance founder Changpeng Zhao stated in the announcement, "Let's invest in Binance!"

Risk: Reserve Bank of India Still Considering Regulation

In early March, the Supreme Court of India clarified that citizens have the right to establish new industries for cryptocurrencies and exchanges, as well as basic trading rights, and the central bank did not provide specific evidence of the harm caused by cryptocurrency trading. Since the Indian government and central bank exerted pressure on cryptocurrency trading in 2018, many exchanges either relocated overseas or faced closure. Now, some platforms are seeking to resume operations in India.

However, according to reports from India, the Reserve Bank of India (RBI) is planning to file a review petition with the Supreme Court of India, as it believes that opening up to cryptocurrencies would pose risks to the banking system. Therefore, if most banks continue to comply with the ban on providing services for cryptocurrency trading, it could introduce uncertainty for the crypto community's optimism.

Related Reading

• India is Open! Supreme Court Overturns Central Bank's Trading Ban, Binance Partner Exchange Surges 50%
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