Following the introduction of digital assets tax on the likes of Bitcoin BTC/USD, Ethereum ETH/USD, and Dogecoin DOGE/USD, the transaction volumes on Indian cryptocurrency exchanges plunged by almost 55% in the first two days, according to data from research firm CREBACO, first reported by MoneyControl.
Meanwhile, the domain traffic has dropped by almost 40% on India’s top cryptocurrency exchanges since April 1.
| Exchange | Drop in volume (March 31 to April 1) |
|---|---|
| WazirX | 70 million to 40 million |
| CoinDCX | 19 million to 12 million |
| Zebpay | 14 million to 4.4 million |
| Bitbns | 11 million to 9.6 million |
Source: CREBACO (via MoneyControl)
In a conversation with Bloomberg, Nischal Shetty, the CEO of India’s largest cryptocurrency exchange, WazirX, called the tax deduction at source “the worst-case scenario for the industry.”
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The CEO of CoinDCX, another popular cryptocurrency trading platform in India, told Bloomberg, “trades placed by buyers will not get executed as efficiently as they do today, and such inefficiency will eventually dwindle the whole ecosystem.”
This came months after the Indian Finance Minister Nirmala Sitharaman, in her Union Budget 2022-23 speech, announced that under the new scheme, all virtual assets such as cryptocurrencies, NFTs, that are sold at a profit would be taxed at the rate of 30% along with 1% TDS. The new rules came into force on Friday.
The country has been mulling regulating cryptocurrencies and digital assets for a very long time and is yet to announce a law regulating or tightening provisions for the use of cryptocurrency in India. Reports have indicated that the authorities in the country are waiting for the global consensus on crypto to take a step forward in this direction.
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