Recent data on trading volume of Indian crypto exchanges show a significant decline in trading practices among Indians just ten days after the implementation of the tax rule. India’s new 30% crypto-tax rule went into effect on April 1, despite many stakeholders and exchange operators warning of the adverse effects.
A research data report shared by Indian blockchain analytics firm Crebaco with Cointelegraph shows that trading volume on top Indian crypto exchanges has declined as high as 70% in the past 10 days.
Trading volume on WazirX, India’s leading crypto exchange, fell from $ 47.8 million on April 1 to $ 13.2 million on April 10. past ten days.
In addition to tough crypto-tax laws directly inspired by India’s gambling laws, many payment processing partners that have Unified Payments Interface (UPI) accessibility also offer heavy ties with crypto exchanges.
Related: Coinbase to Invest in Indian Crypto and Web3 Amid Clarity on Tax Regulations
Coinbase recently had to suspend the cryptocurrency option just a day after the inauguration of its crypto trading services for Indians. While payment processors such as MobiKwik had ties with wazirX and other crypto exchanges following a recent warning from the government.
Statement by NPCI as on 7th April 2022. Referring to some recent media reports on the purchase of Cryptocurrencies using UPI, National Payments Corporation of India would like to clarify that we are not aware of a crypto exchange using UPI. Please see attached document pic.twitter.com/lGTcaSLKeC
– NPCI (@NPCI_NPCI) April 7, 2022
Interestingly enough, although crypto-taxes are based on the gambling laws, the fantasy sports and gambling apps in the country have full access to all forms of payment integration including UPI.
Coinbase shut down UPI service in India few days after NPCI statement.
This is not new, Indian exchanges have been having problems with payment services since 2018 as well.
Strange fact – Actual gambling apps get proper support for payment services while crypto exchanges are being alienated.
– Aditya Singh (@CryptooAdy) April 10, 2022
Many stakeholders in the crypto community have warned that these impractical tax measures and added restrictions on crypto trading will do more damage to the booming crypto economy in the country and the early effects are visible.