In this episode, Sunny Ray sits down with Nischal Shetty, founder of WazirX, to trace his path from an early software engineer in India to a Bitcoin exchange pioneer. Nischal recounts three distinct encounters with Bitcoin, from mining it casually in 2009 to attending crypto meetups in San Francisco in 2017 while running his social media startup, Crowdfire. He explains how Twitter and other platforms restricting third-party developers pushed him toward decentralization as a philosophy, and how a frustrating personal experience buying his first Bitcoin inspired him to launch WazirX in March 2018. Just three weeks after launch, the RBI banking circular hit the industry, forcing Nischal and his team to build an innovative auto-matching peer-to-peer trading system that let users transact without direct exchange bank accounts. He details how the system minimized decision points and fraud risk through a scaling trust model, allowing trades to complete in under two minutes. The conversation covers entrepreneurship, resilience against regulatory pressure, and the belief that decentralized technology should let builders create without permission.
Nischal Shetty explains how WazirX outsmarted India's banking ban with an ingenious peer-to-peer Bitcoin trading model.
What's your story prior to and after learning about Bitcoin?
I had three major encounters with Bitcoin. First in 2009, I mined it on my desktop but forgot about it and eventually lost it. In 2012 to 2013, friends sent me Bitcoin freely through wallets, but I was too busy building my social media startup, Crowdfire, to pay attention. The third time, in 2017, attending meetups in San Francisco, is when I finally went all in.
You said you mined Bitcoin in 2009. Did you hold onto it?
No, I lost it. I really don't remember how much I mined or what the numbers were. I lost it because I sold that computer a few years later. But it's okay, there are no regrets.
What pushed you toward building something in crypto?
Twitter and other platforms started changing their API policies, forcing us to stop building certain consumer features because they didn't want competition. That taught me these giants can change the rules whenever they want. It made me realize a developer should build where no one can stop them, and that seeded the idea of building something decentralized.
Can you explain the name WazirX and where the inspiration came from?
Wazir is the queen piece in chess, called Wazir in Hindi. Since it's a financial market and trading is about making moves, like when to buy or sell, I wanted our product to be the most powerful piece for our users, like the queen in chess, so they could make any move they wanted and win eventually. So we named it WazirX, X for exchange.
After the RBI banking circular hit just three weeks after launch, what did you do?
We knew it wasn't illegal, it just meant we wouldn't have a bank account, so we built a peer-to-peer solution. We created the first peer-to-peer exchange in the world with an open order book and auto-matching, unlike local Bitcoins style classifieds. Buyers and sellers transferred fiat directly bank to bank while we custodied the crypto, releasing it once payment was confirmed.
How did you handle the risk of removing seller ratings and reducing decision points in your peer-to-peer model?
We did KYC and used a step model where transaction limits started small and increased slowly over time based on user behavior. This let us scale up risk according to how much volume a user transacted, which prevented fraud. We had almost no fraud in the system, and average transaction time was about one to two minutes.
Why weren't you worried that the RBI circular effectively applied to personal bank transfers too?
The RBI can only tell banks what to do, not the people of India directly. Banks don't scrutinize personal transfers the way they do business transactions requiring a stated reason. We knew our users weren't breaking any law, and banks can't practically go after millions of people, so we didn't worry about something that wasn't illegal.
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