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Summary
- Cashaa is planning to launch its neo-bank in India by 2021, which will operate as per the guidelines laid by the Reserve Bank of India
- It has recently received clearance from authorities in the US, UK, and Europe, to offer banking in currency denominations of euro, pound Sterling, and US dollar by December 2020.
- Previously banned by RBI, cryptocurrency transactions have seen some ray of hope after the Supreme Court of India quashed RBI’s circular to curb trade in cryptocurrencies.
Fintech start-up and banking services platform Cashaa is making a major dash in the cryptocurrency sector. The London-based crypto-friendly banking services platform has pushed forward with its plans to launch a new-age bank which will allow its customers to trade in Bitcoin and other such cryptocurrencies. It is planning to launch its operations in the United States, United Kingdom and the European Union by the end of this year and India by 2021.
Sources said to tap India’s fast growing crypto user base, Cashaa is planning to launch its neo-bank, which will be based on regulations laid by the Reserve Bank of India (RBI) The Supreme Court of India earlier had rejected a circular issued by the RBI that directed to curb the trade and transactions in cryptocurrencies in the country.
India being a very large market, represents a massive opportunity for the company to gain scale and use it as a base to expand its operations to other developing parts of the world.
There are, however, restrictions on the transactions relating to cryptocurrencies in advanced markets as well like in the US, China and the UK, which could at some stage, create problems for Cashaa to fully implement its plans.
Plans for India
After launching its operations in India, Cashaa hopes to add about 100 million customers in a period of two years. Sources said the company is waiting for a go-ahead from the RBI to issue a license. Currently, there is an inter- ministerial consultation process going on in India which is deliberating upon a proposal to completely ban cryptocurrencies in the country.
According to reports, the Indian government might not go ahead with this proposal as it is outdated and would not ban trade in cryptocurrencies for very long.
Cryptocurrencies, like bitcoin, have been available in India as an over-the-counter product for some time now. However, they continue to be unregulated under and subjected to high market risk. Thus, Cashaa is pinning its hopes on the favourable apex court judgement that quashed the RBI's circular.
Why so complicated?
Currently, people in India own cryptocurrencies like Bitcoin as investment products and are unable to buy or sell them in a recognised exchange in India. The RBI has maintained that there are high risks involved and has cautioned against claims that cryptocurrencies can bring about financial stability and help develop a strong financial market infrastructure.
The central bank has noted that several central banks of advanced countries have exercised caution in embracing these technologies. There is currently a huge gap in understanding the emerging technologies and how they will evolve in the future.
Challenges in implementation
The biggest roadblock in the implementation of cryptocurrency in any country will be lack of understanding of the investing/ transaction. People can lose their money and wealth without even understanding how it has happened.
In the past few years, the trading in these currencies has been extremely volatile with thousands of people (if not millions) having lost a significant amount of their wealth in them. The experience of these losses would be fresh in peoples’ minds, and it would deter them to invest in them.
Cashaa has recently acquired clearance from regulators in the UK, Europe and the US to function as a crypto-friendly banking platform. The aim is to start working with the euro, British pound and U.S. greenback by December this year.
Outlook
Technology companies have left no stone unturned to promote cryptocurrency as an alternative to traditional sovereign backed currencies. They have been able to attract the people to invest in it, but it has time and again failed to live up to the understanding of finance and economics experts.
As on date, cryptocurrency is no more than a technological curiosity with an unclear understanding. People who have invested in cryptocurrencies have done so with speculative interests and are currently not well-protected by any government or legislation. In such a scenario, it will be interesting to see if Cashaa is able to deliver its promises and convince people to invest and trust cryptocurrencies.
