When Vitalik Buterin, one of the creators of the cryptocurrency Ethereum, donated more than 50 trillion Shiba Inu coins ($1 billion) into an aid fund for Covid-19-ravaged India, it raised more concern than relief in the crypto-wary nation.
Not only did the contribution—more than 5% of total Shiba Inu coins in circulation—send prices plummeting by 50%, it also created questions about how to use the currency in a country that strictly monitors foreign inflows and where the central bank has voiced “major concerns” about cryptocurrency in general, forget about a memecoin.
Sandeep Nailwal, a cryptocurrency entrepreneur from New Delhi who created the fund three weeks ago, says he has hit upon a solution. He announced last month that his India Covid Crypto Relief Fund has already identified an entity to convert the donations into rupees, and an aid-receiver compliant with India’s Foreign Contribution Regulation Act. He now vows to “act responsibly” to protect the retail community. The fund intends to liquidate only gradually to protect prices.
Transparency Update:We are swapping the $DOGE with $USDC.The funds will be transferred to this account for an i… https://t.co/TLvpZszvP5
— India’s Crypto Covid Relief Fund 🇮🇳 (@CryptoRelief_) 1620328491000
Prices of Shiba Inu meme coins have recovered about 25% in the past 24 hours, according to CoinGecko.com.
The massive crypto donation comes at a time when India’s regulator has been expressing concerns about the asset class such as questions about the source of funds. That has spurred discussions about whether charities that receive such donations must dispose of the coins before any looming ban.
“Transferring donations, even large ones, is secure and simple through crypto,” said Vikram Rangala, chief operating officer of crypto exchange ZebPay, that aims to support Nailwal’s covid fund. “Blockchain has advantages over traditional rupee or fiat payments. There’s no way that people are using donations as a way to get rid of their crypto. They can just sell it if they don’t want it anymore.”
Nailwal’s team has collected $1.04 billion worth of cryptocurrencies in donations. The efforts come at a time when India is struggling with record daily coronavirus infections and deaths on the back of a crumbling health infrastructure lacking vaccines, medicines, oxygen supply and hospital beds. India has reported more than 300,000 daily infections for 22 consecutive days, highlighting the country’s slide into the world’s worst health crisis.
The Crypto Coid Relief Fund didn’t immediately reply to an email seeking comment. Nailwal didn’t answer calls and messages. Representatives for India’s finance ministry and central bank didn’t immediately reply to emails seeking comment.
Other cryptocurrency exchanges have also tied up with Nailwal’s fund to provide support with fund collections, audit, and procurement of materials.
“Transferring cryptos from Indian citizens into the covid relief funds is faster as it is easy to conduct a due-diligence on the source of such funds to comply with regulatory rules,” said Ramalingam Subramanian, head of marketing at CoinDCX, one of the exchanges offering support.
Bloomberg’s Vrishti Beniwal and Anirban Nag contributed to this story.
