CIFDAQ Founder Himanshu Maradiya Challenges Web3 Brain Drain with India-Centric Approach
“India boasts a strong foundation in the Web3 sector, with a rapidly growing developer community that has expanded from 3% of the global pool in 2018 to 12% in 2023. The country's ecosystem is diverse and dynamic, home to over 1,000 Web3 startups,” said Maradiya.
India's Web3 landscape is thriving with new players coming in. However, this burgeoning sector finds itself at a critical crossroads. On one hand, India grapples with stringent regulatory measures that pose challenges for crypto and blockchain businesses. On the other, the country boasts a vibrant environment ripe with opportunities for exponential growth in the Web3 sector.
To gain a deeper understanding of this dynamic industry and also spotlight a key player in the ecosystem, we sat down with Himanshu Maradiya, Founder and Chairman of CIFDAQ.
In this exclusive interview, Maradiya shares key insights on India's Web3 challenges and explains CIFDAQ's unique position within this ecosystem.
The Paradox of India's Web3 Landscape
According to KPMG, India boasts one of the world's largest Web3 ecosystems, with over 1,000 startups operating in this space. The country's enthusiasm for cryptocurrencies is equally impressive, with recent research indicating that India is home to an estimated 100 million crypto owners as of late 2023.
The vibrancy of India's Web3 scene is further evidenced by the proliferation of meetups, events, and gatherings across the country that serve as hotbeds for innovation, networking, and knowledge sharing.
However, beneath this growth lies a concerning trend that threatens India's position in the global Web3 landscape. At nearly every industry gathering, many founders reveal they are relocating to Dubai or have already moved.
Entrepreneurs are increasingly seeking jurisdictions that offer welcoming environments, supportive ecosystems, and favorable regulatory frameworks. Dubai, in particular, has emerged as a prime destination, actively crafting rules and regulations designed to attract Web3 talent and businesses.
The catalyst for this shift can be traced back to November 2021, when anticipation of high taxes and stringent cryptocurrency regulations in the proposed Crypto Bill began to take hold. Since then, industry executives estimate that over a hundred Indian entrepreneurs have relocated to Dubai and registered their businesses there.
Additionally, reports suggest that following the introduction of a 1% Tax Deducted at Source (TDS) and a 30% tax on Virtual Digital Assets (VDAs), trading volumes on Indian exchanges have plummeted by a staggering 97%, with active users decreasing by 81%.
Maradiya’s Take on India's Regulatory Approach
Despite the challenges faced by the Indian crypto industry, Maradiya offers an optimistic perspective on the country's regulatory landscape.
“Crypto regulations in India are playing a significant role in shaping the blockchain and crypto industry,” emphasized Maradiya.
Furthermore, he stated that while these regulations are indeed stringent, they are designed to create a balanced framework that promotes innovation, security, and financial stability. He points out that this balance is achieved by incorporating crypto into the taxation framework and requiring registration of Reporting Entities (RE) with the Financial Intelligence Unit (FIU) under the Ministry of Finance, Government of India.
In light of this regulatory landscape, Maradiya revealed that CIFDAQ adopts a country-centric approach and plans to operate in India as a Registered Entity with the FIU under the Ministry of Finance.
When discussing the trend of Indian Web3 startups relocating to Dubai, Maradiya offered a balanced view. He recognized that the migration of startups to Dubai is primarily motivated by regulatory clarity, tax benefits, and a business-friendly environment.
Additionally, he noted that Dubai's well-defined regulations, low taxes, and strong support for Web3 technologies make it an attractive destination for startups seeking stability and growth opportunities. The vibrant international community and access to global markets in Dubai further enhance its appeal.
However, Maradiya was quick to highlight India's unique position and potential in the global Web3 landscape. He pointed out several key strengths that position India as a potential leader in this space.
“India boasts a strong foundation in the Web3 sector, with a rapidly growing developer community that has expanded from 3% of the global pool in 2018 to 12% in 2023. The country's ecosystem is diverse and dynamic, home to over 1,000 Web3 startups,” said Maradiya.
“India also ranks first in the Chainalysis Global Crypto Adoption Index for 2023, driven by a predominantly young and tech-savvy user base.”
Maradiya also emphasized the progress being made at the government level. He noted that the Indian government is increasingly recognizing the potential of blockchain technology, with multiple state governments initiating blockchain-based projects. He believes that further regulatory clarity will only enhance this progress.
The CIFDAQ Blueprint
Moving from the broader industry perspective, our conversation with Maradiya shifted to focus on his venture, CIFDAQ, a new-generation blockchain ecosystem that leverages artificial intelligence (AI) and machine learning (ML) to create a platform that's resilient against external hacking, fraud, and corruption.
Interestingly, CIFDAQ has been self-funded to date, but Maradiya revealed that the company is now preparing for an upcoming funding round of Rs 40 crore.
“A significant portion of these funds will be allocated towards continuous technological enhancements, ensuring that CIFDAQ remains at the forefront of innovation in the industry,” Maradiya added.
In addition, Maradiya shared that the company intends to raise a total of Rs 200 crore in phases over the next 12 months through equity dilution.
The following is an excerpt of the interview that further delves into CIFDAQ.
(Editorial Note: The answers in the following excerpt have been condensed for brevity. However, we have carefully preserved the original context and meaning of Maradiya's statements.)
Newzchain: What is CIFDAQ's current primary focus in terms of product development and market expansion?
Maradiya: Currently, CIFDAQ's primary focus in terms of product development revolves around launching a robust and secure blockchain ecosystem tailored for the Indian and Southeast Asian markets. In parallel, CIFDAQ is gearing up for market expansion strategies that will initially focus on establishing a strong presence within India's burgeoning blockchain and Web3 ecosystem.
We aim to position CIFDAQ as a leader in facilitating secure digital transactions and fostering innovation across various sectors including finance, real estate, and supply chain management.
Furthermore, our market expansion efforts will extend to Southeast Asia, adapting our platform to local needs and regulations. The focus is on user-centric design and international compliance to ensure a trustworthy blockchain experience.
Our key product milestones include:
Q3 2024: Introducing our centralized exchange (CEX) and listing CIFD, our native token.Q4 2024: Launching Dex and DeFi products for decentralized trading and financial services.
Concurrent with these: Releasing MPC Wallet V 2.0 with enhanced security and functionality.
These initiatives aim to enhance our blockchain ecosystem and expand our market presence.
Looking ahead to 2025, our roadmap includes:
Q1: Launching an NFT marketplace for digital collectibles and art.
Q1: Introducing CIFDAQ Custodian for institutional clients and Launchpad for new blockchain projects.
Q2: Entering the GameFi sector to integrate blockchain with gaming.
Q3: Rolling out Layer 1 and Layer 2 blockchain solutions for scalable, efficient frameworks.
Newzchain: What role does the CIFD Coin play in your ecosystem, and how does it drive value creation?
Maradiya: CIFD Coin is our native cryptocurrency, crucial for value creation in our ecosystem. It serves as the primary medium of exchange, facilitating transactions and fee payments. We use it for staking, governance, and managing digital assets, including NFTs. CIFD Coin also rewards network contributors and AI data providers, incentivizing participation.
Furthermore, coin holders can vote on platform decisions, ensuring community involvement in our ecosystem's evolution. And it's designed for cross-platform utility, enhancing its value beyond our ecosystem.
CIFD Coin is actively traded on various exchanges, providing liquidity for users. These functions collectively promote decentralization, security, and transparency, making CIFD Coin vital to our ecosystem's growth and innovation.
Newzchain: Where do you see CIFDAQ in the next five years? What are the major milestones you aim to achieve within this period?
Maradiya: In the next five years, CIFDAQ is poised to become one of India's leading blockchain ecosystem companies, driving global blockchain development with world-class products and services tailored to local ecosystems.
Our initial focus for the first 24 months is on introducing and scaling our products, stabilizing our technology and operations, and securing licenses in at least one or two Southeast Asian countries. We plan to expand our operations throughout the region.
Beyond innovation, we're committed to positively impacting the economy and fostering market growth. We aim to ensure our stakeholders benefit from our success through regulatory compliance and ethical business practices that promote sustainability and long-term value creation.
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