Indian cryptocurrencies are crushing trading volumes like local exchanges Eye Exodus
by Arthur · July 5, 2022
Trading volume across crypto exchanges in India has plummeted after a new transaction tax law was recently enforced.
On July 1, 2022, the Government of India enacted a tax of 1% (called TDS, or Tax Deducted at Source) on all crypto-related transactions of more than $ 126 (INR 10,000).
According to this rule, it is now mandatory for exchanges to deduct 1% of the transaction value from the buyer. This amount must then be paid as tax to the state.
Following the implementation of the tax last week, trading volumes across exchanges including WazirX, ZebPay and CoinDCX fell by at least 50%.
Decrypt has contacted WazirX and CoinDCX for comment.
On June 30, Binance-backed WazirX hosted a daily trading volume of $ 14.23 million, falling to just $ 5.32 million on July 1. It fell as low as $ 2.73 million on July 3, according to data from Nomics.
CoinDCXvolume fell 61% to $ 2.59 million on July 1; as before ZebPaythe volume has fallen by 56% over the same time period.
In February 2022 became The Government of India also introduced a 30% tax on all cryptocurrency-related income as well.
These new tax laws have also appeared in crypto companies looking beyond India to establish stores.
The Indian Crypto Exodus
Though chain light reported India ranks second for cryptocurrency use, the increased tax burden and the current bear market have pressured some companies to migrate to crypto-friendly nations, including Dubai and Singapore.
Recently, Nischal Shetty and Siddharth Menon, co-founders WazirX, moved to Dubai with their families, reported Indian Express. CoinDCX, the $ 2 billion crypto-trading company based in Bengaluru, also has established a Singapore arm called “Primestack Pte.”
Many companies migrate to the UAE, especially Dubai, due to its crypto-friendly nature. Dubai has created several tax-free zones issuance of cryptocurrency licenses, including Dubai Multi-Commodity Center and Dubai Airport Free Zone.
By establishing a company in these tax-free zones in Dubai, you can also get a residence visa.
As for Singapore’s appeal, no taxes are imposed on crypto transactions in the city state.
“India has been fighting brain drain for decades. This is a generational opportunity to reset the odds in our favor, “said Ashish Singhal, co-founder and CEO of the cryptocurrency exchange CoinSwitch Decrypt. “Indian investors and innovators can benefit from cryptocurrency if there is more regulatory clarity.”
Nevertheless, there is no clear regulatory process or license for crypto platforms in India that makes it difficult for companies to operate in the country.
And now it seems that at least a few crypto entrepreneurs are taking the leap abroad.
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