India’s Crypto Exchanges Has Decrease Drastically When The 30% Crypto Tax Implemented
Fresh data on the trading volume of India’s crypto exchanges shows a dramatic drop in trading activities among Indians within 10 days after the tax policy went into effect. India’s new 30% crypto tax legislation went into force on April 1st, despite several stakeholders and exchange operators warning of its negative consequences.
The volumes of four Indian exchanges were collated by analyzing data on CoinMarketCap and Nomics, a data firm. The data reveal a drop of 72% on WazirX, 59% on ZebPay, 52% on CoinDCX and 41% on BitBns. The trading volumes were measured in U.S. dollars. It is unclear whether the decline in trading volumes is due to the new tax law, as the drop in Indian markets is mainly consistent with a global trend.
Coinbase was forced to stop the crypto payment option just one day after launching its crypto trading services for Indians. While payment processors such as MobiKwik had severed relations with WazirX and other crypto exchanges following a recent government warning.
Sathvik Vishwanath, co-founder and CEO of Unocoin, another Indian exchange, said the new tax law is affecting the market.
“People earning less than 1,000,000 (Indian rupees) per year is affected by 30% fixed income tax on crypto. 1% TDS is affecting the market makers and liquidity providers. Both are needed for better crypto ecosystem in India,”Vishwanath tweeted
Anton Gulin, regional director of the AAX crypto exchange, said the drop in volume should be short term.
“AAX exchange has seen an outflow of active Indian users within the past weeks, as well. However, I believe that the tax rate may be revised to attract more taxpayers, as this is the ultimate goal for any government,”Gulin said
Johnny Lyu, CEO of KuCoin, another trading platform, said that some beginners are less willing to invest in crypto in the short term. “KuCoin hasn’t seen any outflow though, according to internal data. This can be explained by the higher degree of crypto nativeness among our users,” he said. “The new law will affect short-term market mood and behaviour, but it will be difficult to block the adoption of crypto in the long run.”
Despite the fact that crypto taxes are based on gambling laws, the country’s fantasy sports and gambling apps have full access to all forms of payment integration, including UPI.
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