India-based crypto exchange goes for licenses in Singapore, Dubai
India-based crypto exchange ZebPay is now looking for licenses in Singapore and the United Arab Emirates on the back of its home country’s tax policies.
The outgoing CEO of the crypto exchange told Bloomberg that the 1% transaction tax India imposed on cryptocurrencies this year is affecting trading volumes.
New crypto exchange rules affect business
While the company will retain its presence in the Indian market, CEO Avinash Shekhar is of the view that the tax “has to come down. Otherwise, things will not improve.”
That said, the executive has reportedly decided to continue serving as an advisor to ZebPay while he launches his own Web3 business from Singapore or Dubai.
Meanwhile, the startup has imposed pay cuts, with non-executive staff seeing a 6% pay cut in the current business environment.
ZebPay is not alone in cutting costs. Be[In]Crypto reported this week that WazirX, a prominent Indian cryptocurrency exchange, reduced its workforce by 40%, affecting 40-70 of the company’s 150 workers.
According to a 2022 Chainalysis report, India, which had the world’s second largest crypto-loving population, has seen its ranking in crypto adoption drop to fourth place year-on-year.
A recent KuCoin survey estimated that India has around 115 million crypto investors who have held or traded crypto in the past six months. Additionally, trading volumes have declined as a result of Finance Minister Nirmala Sitharaman’s proposal in her budget address for the fiscal year beginning April 2022 to impose a 30% tax on all cryptocurrency gains. With that, an additional 1% tax at source on all cryptocurrency transfers above a specific threshold has put pressure on the sector since its implementation in July.
Why are companies heading to Dubai and Singapore?
Dubai and Singapore are locking horns to become the most attractive destination for crypto developers and investors. Both regions have handed out multiple licenses to allow crypto businesses to operate legally, competing with Asia’s highly taxed crypto counterpart.
Earlier in March, Polygon CEO Sandeep Nailwal stated that India’s ambivalence towards cryptocurrencies is scaring away talent, investors and business owners and could continue to lead to a “brain drain” in the sector in the coming years.
Nailwal also shifted base from India to Dubai two years back.
In the latest migrations, the co-founders of Indian crypto exchange WazirX, Nishal Shetty and Siddharth Menon, reportedly moved to Dubai. Troubled crypto company Vauld had also moved to Singapore.
This comes while India is yet to announce a crypto bill which is expected to bring clarity on crypto processing for its various use cases.
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