- What it is: Pi42 is India’s first ever platform that allows trading of crypto perpetual futures contracts denominated and settled in INR.
- Founders: The platform is co-founded by crypto veterans Nischal Shetty (founder of WazirX) and Avinash Shekhar (former CEO of Zebpay) with an aim to build a compliant, tax-efficient crypto derivatives ecosystem in India.
Key Features & Offering
| Feature | Description |
|---|---|
| INR-denominated & settled contracts | Traders can deposit, trade, and withdraw in Indian Rupees, bypassing stablecoin/USDT conversions. |
| Perpetual futures | Contracts without expiry, allowing long or short positions with leverage. The Economic Times |
| No USDT dependence | Simplifies the process and reduces friction, costs, and regulatory gray areas experienced with foreign stablecoins. |
| Compliance & regulation | Pi42 is aligned with Indian laws: compliant with PMLA (Prevention of Money Laundering Act), registered with the Financial Intelligence Unit (FIU). |
| Features for traders | Advanced tools: margin trading, stop-loss/limit orders, options features, competitive maker/taker fee structure. |
Why It Matters
- Eases tax & regulatory burden: Many Indian traders face challenges due to stablecoin conversions and uncertain regulatory treatment (like flat 30% tax, 1% TDS etc.). Pi42 claims its structure reduces these burdens.
- Keeps trading onshore: Indian crypto traders often use offshore platforms due to limitations at home. Pi42 provides an onshore, compliant alternative.
- Better clarity for derivatives trading: Until now, there were limited options in derivatives/ futures trading denominated in INR; this move could foster more participation in this space.
Challenges & Considerations
- Regulatory oversight: Although it’s registered with FIU and compliant under PMLA, the VDA (Virtual Digital Asset) framework is still evolving, which could affect how crypto derivatives are taxed and regulated.
- User awareness & trust: New entrants in India’s crypto-derivatives space face skepticism due to past security incidents in other exchanges. Transparency and security will be key.
- Liquidity and depth: As a newer platform, building enough liquidity to compete with international derivatives exchanges will be important for fair pricing and trader usability.
- Fee structure & levies: While Pi42 is trying to structure things favorably (tax efficiency, etc.), actual charges like fees, margins, withdrawal speed etc will determine adoption.
Market Impact & Outlook
- For existing users: Traders will likely shift from USDT-margined contracts or foreign platforms to Pi42 to reduce conversion costs and foreign-stablecoin risk.
- For competition: Other exchanges may be pressured to introduce INR-settled derivatives or better compliance to maintain their market share.
- For regulation and policy: This may push regulatory bodies to clarify tax rules, VDA status, and derivatives regulation for crypto more aggressively.
- Growth potential: With over 30 million Indian crypto investors, Pi42 is targeting a large addressable market. Focusing on compliance, simplicity, and local banking support may help scale rapidly.
Conclusion
Pi42’s launch as India’s first INR-settled crypto perpetual futures exchange marks an important step in localizing crypto derivatives trading. By eliminating dependence on stablecoins, aiming for regulatory compliance, and offering features tailored for Indian users, Pi42 could change how derivatives trading in crypto happens in India. Success will depend on regulatory clarity, user experience, liquidity, and trust.
