Crypto Exchange Volume Falling In India; After-effect of Taxation
- A Crypto platform says that the trading volume of Indian Crypto exchanges has plunged by 90-95%.
- This fall seems to be the after effect of heavy taxing of crypto in India.
- Recently, the RBI imposed an additional 1% TDS on digital assets.
Crypto India, a crypto analysis platform, claims that the trading volume of Indian Crypto exchanges has plunged by 90-95%, three months after new crypto laws became applicable in the country. The platform argues that based on current volumes, exchanges can only generate trading fee revenue of $1,000 to $3,000 maximum.
Indian Crypto exchange’s trading volume have plunged by 90-95% , 3 months after new crypto laws became applicable.
Based on current volumes – Exchanges are only able to generate trading fee revenue of $1000 to $3000 Max.
Bitbns seems to be still doing well.
Tough times ahead. pic.twitter.com/KNDbea9BCn
— Crypto India (@CryptooIndia) July 4, 2022
Early this year, the Indian Finance Ministry declared heavy taxation on crypto and other digital assets. This massive tax seems to have affected exchanges considerably.
Reportedly, WazirX, one of India’s top exchanges, has seen a dip of 98% in trading volume in the past few months. ZebPay, a platform with three million members, took a hit of 94%. And CoinDCX, another major crypto investment app, saw volumes go down by 93%. The only exchange that is doing slightly better in this situation is Bitbns, whose volumes have fallen by just 17%.
To add insult to injury, the Reserve Bank of India (RBI) has imposed an additional 1% TDS on digital assets and cryptocurrencies. The tax is applicable on payments beyond Rs 10,000 in a year, according to Section 194S in the I-T Act (per Finance Act, 2022).
Discussing the issue, Rajagopal Menon of WazirX, states that there has been a fall in trading across the industry as investors shift to hold. He claims that there may be another dip as traders see their capital getting locked while trading on KYC-compliant Indian exchanges.
Offering a more optimistic take, Edul Patel, CEO of Mudrex says, “We are actively hiring and there is no question of trimming. Bear markets weed out the noise and allow space for creativity and innovation. For us, it is a ‘build’ market and not a bear market.”