New trading volume data from Indian crypto exchanges shows a sharp drop in trading practices among Indians just ten days after the tax regulations were introduced. India’s new 30% crypto tax rule went into effect on April 1, despite many advocacy groups and exchange operators warning of its negative impact.
A research data report shared with Cointelegraph by Indian blockchain analytics firm Crebaco shows that trading volume on top Indian crypto exchanges has fallen by as much as 70% over the past 10 days.
Trading volume on WazirX, the top crypto exchange in India, fell to $13.2 million on Sunday from $47.8 million on April 1. CoinDCX’s trading volume fell from $12.16 million to $5.76 million, followed by Bitbns with an overall drop of 41.29% over the past ten days.
Aside from strict crypto tax laws directly inspired by India’s gambling laws, many payment processing partners offering Unified Payments Interface (UPI) accessibility have also severed ties with crypto exchanges.
Related: Coinbase invests in Indian crypto and Web3 amid clarity of tax rules
Coinbase recently had to suspend the crypto payment option just a day after opening its crypto trading services to Indians. Meanwhile, payment processors like MobiKwik had severed ties with companies like WazirX and other crypto exchanges following a recent government warning.
Statement by NPCI on April 7, 2022. Referring to some recent media reports about buying cryptocurrencies with UPI, National Payments Corporation of India would like to clarify that we are not aware of any crypto exchanges with UPI. See attached document pic.twitter.com/lGTcaSLKeC
— NPCI (@NPCI_NPCI) April 7, 2022
Interestingly, although crypto taxes are based on gambling laws, the fantasy sports and gambling apps in the country have full access to all forms of payment integration, including UPI.
Coinbase disabled UPI service in India days after the NPCI statement.
This is not new, Indian exchanges have also been facing payment service issues since 2018.
Strange Fact – Actual gambling apps get decent support from payment services while alienating crypto exchanges.
— Aditya Singh (@CryptooAdy) April 10, 2022
Many stakeholders in the crypto community have warned that these impractical tax measures and additional restrictions on crypto trading would cause more damage to the thriving crypto economy in the country, and the first effects are visible.
https://cointelegraph.com/news/indian-crypto-exchanges-volume-plunges-down-as-30-tax-goes-into-effect Indian crypto exchanges volume plummets as 30% tax goes into effect