Under Covid Crisis, Crypto shows Its True Value
Singapore, May 20: It started with a tweet from Sandeep Nailwal. “Can’t take this sitting down anymore” the tweet said. “I am going to run a COVID relief campaign in lieu of what is going on in India…I will take full responsibility for transparency, funds usage and regulatory compliance…” Nailwal is the cofounder of Polygon (previously Matic), India’s first crypto unicorn. Like many in the crypto community, he was wondering how cryptocurrency and blockchain could help during India’s Covid crisis.
During Covid Crisis, Time Counts and Crypto Delivers
India’s active Covid cases now stand at over 20 million and with a death toll above 230,000. The crisis in India has been rightly described by the domestic and international press as being out of control, with Oxygen supplies dwindling and crematoriums working around the clock. One of the ways the international community can help is by sending oxygen canisters to India or donating funds for people to purchase oxygen or other needed medical supplies.
The problem is that traditional sourcing channels have become overwhelmed and price gouging and black marketeering have become real roadblocks. Oftentimes money for life-saving medications and hospital care is unattainable to the average Indian, many of whom are not flush with savings. Newer paths need to be created quickly to get aid to the people who need it the most. Under these circumstances, cryptocurrency provides another option that could actually save lives.
Crypto Can Help and Is Helping
In an emergency, time counts and Crypto wallets can be set up instantly. Many exchanges offer almost immediate Indian Rupee withdrawals. Bitcoin and Cryptocurrency provide a unique solution because family assistance can be sent from across the country or even across the world in the time it takes a Bitcoin transaction to confirm. In fact, many local Indian crypto exchanges are stepping up to assist. WazirX, one of India’s larger exchanges just announced that they would donate ₹8 crores for Covid relief to 10 different organisations, including the Chief Minister’s Funds of Maharashtra and Karnataka.
“We are deeply concerned about the current situation in India. It’s truly heartbreaking.” said Wayne Huang, co-founder and CEO of XREX Inc., an international exchange operating in the Indian market, “We believe that cryptocurrency can help India through this crisis, whether that involved raising funds or transferring them quickly to those who need it, the crypto community stands with India to navigate this crisis and emerge stronger.”
Efforts from Global Crypto Communities
While others in the crypto community here in India are pulling out all stops to help, many think it will take an international effort to truly be effective. Indeed, an international response is exactly what Polygon’s Nailwal elicited. Balaji Srinivasan, former CTO of Coinbase soon replied and announced that he and Vitalik Buterin, co-founder of Ethereum would also be joining the campaign. Buterin kicked things off by donating 100 Ether and 100 Maker tokens worth $650,000 to India’s Covid relief fund. This donation was quickly followed by Surojit Chatterjee, CPO of Coinbase, and Eric Meltzer, an early crypto investor, along with several other crypto personalities. In a short period, the fund raised over 22 cr in cryptocurrencies, including 1 Bitcoin worth over Rs 41 lakh from cricketer Brett Lee.
Non-fungible token (NFT) artists on the OpenSea platform recently conducted an event called “Fable” where they auctioned 22 pieces of art created by artist volunteers to support on-ground charities in India supplying patients with needed oxygen cylinders for many who are unable to afford it. This action comes from the crypto community is fast and efficient through blockchain technology.
In a public health crisis like the one confronting India today, every bit of help counts, whether that is labor through volunteering or funds coming in from all over the world. Despite the rapid industry growth during the pandemic, India continues to have a controversial relationship with Crypto. In March 2020, the Supreme Court overturned an RBI edict that prohibited cryptocurrency exchanges from doing business with banks. Since then, it has been anything but smooth sailing.
Fortunately, if the most recent reports are to be believed, the winds would appear to be changing. A few months ago, the Narendra Modi-led BJP government paused a bill to ban cryptocurrencies in favor of what Finance Minister Nirmala Sitharam termed “a calibrated view on the subject. While these much-awaited regulations will take some time to be announced and implemented, particularly in light of the current emergency, now is a great time for Indian authorities to see firsthand how cryptocurrency and blockchain can be of use to fight against the effects of the virus and truly save lives.
Hope and Opportunities in the Pandemic
Echoing the trouble that Crypto itself finds itself in India, the Crypto Covid Relief Fund could run into some regulatory issues. While Polygon’s Nailwal pledged to handle regulatory aspects around donations, some laws require reporting all foreign origin aid in India. Normally foreign donations are governed by the Foreign Contribution (Regulation) Act of 2010 and Foreign Exchange Management Act of 1999, but it is unclear how these regulations apply to cryptocurrency and whether or not the government will relax policy given the scale of human catastrophe the country is dealing with.
There is a hope that this may lead to a positive reset for the relationship between the crypto community and the government of India, and that can only be positive. Tangible gestures like this from the international and local community will go a long way toward building some goodwill with regulators and highlight the good that Crypto brings for India and its citizens.