Jana Gana Mana! – According to data collected by Crebaco, a cryptocurrency research firm, the cryptocurrency trading volumes of major Indian exchanges have it has dropped significantly since April 1. That day, the new tax on cryptocurrency profits came into effect in India. The volume of WazirX, the country’s largest stock exchange, fell by 72%.
Deliquescent commercial volumes in India
Volumes from four Indian exchanges were collected by analyzing data on CoinMarketCap and Nomics, another data company. The data reveals a 72% drop on WazirX, 59% on ZebPay, 52% on CoinDCX and 41% on BitBns. Crebaco measured trading volumes in US dollars.
India now applies a tax of 30% on profits from crypto transactions. In addition, the country does not allow to offset gains with losses on other transactions. The most controversial provision will not go into effect until July 1. In effect, India will then impose a 1% withholding tax (TDS).
“April 1st, 2nd and 3rd were holidays. Since then, volumes have continued to decline. I don’t think she will come back (…) she has created a new benchmark. It can sink lower or sideways, but is unlikely to rise again. It is clear that the new tax has had a negative impact on the market. The government has to look at this. And since there is no way to stop this (crypto), the government should embrace the technology. “
Sidharth Sogani, CEO of the Crebaco research company
According to crypto lawyer Suril Desai, the drop in volumes could mean the trade has moved elsewhere. He affirmed it “The only trading volumes we get come from centralized exchanges. Off-chain trade of which there is no trace It could happen”.
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Cryptocurrency exchanges want to be reassuring
The ZebPay exchange declined the comment. Furthermore, the other exchanges did not immediately respond to requests for comment. Sathvik Vishwanath, co-founder and CEO of Unocoin, another Indian exchange, has meanwhile declared that the new tax legislation has affected the market.
“People earning less than Rs 1,000,000 (approximately $ 13,000) per year are subject to a 30% fixed income tax on cryptocurrencies. 1% TDS affects market makers and liquidity providers. Both are necessary for a better crypto ecosystem in India. “
Sathvik Vishwanath, co-founder and CEO of the Indian exchange Unocoin
Anton Gulin, regional head of cryptocurrency exchange AAX, said the decline in volumes should reverse in the near term.
“The AAX exchange has also seen an outflow of active Indian users in the past few weeks. However, I think the tax rate could be revised to attract more taxpayers, as this is the ultimate goal of any government. “
Anton Gulin, regional head of the cryptocurrency exchange AAX
Johnny Lyu, CEO of the KuCoin trading platform, said some beginners are less inclined to invest in short-term cryptocurrencies.
“KuCoin did not experience any outflows, however, according to internal data. This can be explained by the higher degree of crypto-nativity among our users (…) The new law will affect the mood and behavior of the market in the short term, but it will be difficult to block the adoption of cryptocurrencies in the long term. “
Johnny Lyu, CEO of the KuCoin trading platform
While the recent cryptocurrency regulation in India has obviously caused a drop in trading volumes, this should only be temporary. Indeed, these new laws at least have the merit of define a clear framework for cryptocurrencies. As a result, many investors could pack their suitcases in the country. In any case, this is the case with the exchange Coinbase which has decided to invest a million dollars in the country.
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