Only 10 days after the tax rule was implemented, new data on the trading volume of Indian crypto exchanges show a dramatic drop in trading practices among Indians. Despite several stakeholders and exchange operators warning of the negative consequences, India’s new 30% crypto tax rule went into effect on April 1st.
According to a survey published by Crebaco, an Indian blockchain analytic startup, trading volume on prominent crypto exchanges has dropped by as much as 70% in the last ten days.
WazirX, India’s largest crypto exchange, saw its trade volume drop from $47.8 million on April 1 to $13.2 million on Sunday. CoinDCX’s trading volume declined from $12.16 million to $5.76 million in the last ten days, while Bitbns’ trading volume fell by 41.29%.
Apart from the draconian crypto tax legislation influenced by India’s gambling laws, many payment processing partners who offer Unified Payments Interface (UPI) accessibility have also cut relations with cryptocurrency exchanges.
Just a day after launching its crypto trading services for Indians, Coinbase had to stop the crypto payment option. Meanwhile, following a recent warning from the authorities, payment processors such as MobiKwik have severed links with WazirX and other crypto exchanges.
Even if cryptocurrency taxes are predicated on gambling legislation, fantasy sports and gambling apps in the country have full access to all types of payment integration, including UPI.
Many members of the crypto community have warned that these ineffective tax measures and new limits on crypto trading will wreak havoc on the country’s booming crypto sector, and the impacts are already being seen.