New data on Indian crypto-exchange trading volume shows a marked decline in Indian trading practices just ten days following the implementation of the tax rule. India’s new 30% crypto tax law came into effect April 1, despite warnings from many stakeholders and exchange operators about its potential ill effects.
Cointelegraph and Crebaco shared data from their research report that shows that trading volume on top Indian cryptocurrency exchanges has dropped as much as 70% over the past 10 days.
WazirX’s trading volume, India’s leading cryptocurrency exchange, fell from $47.8 Million on April 1st to $13.2 Million on Sunday. CoinDCX saw its trading volume drop from $12.16million to $5.76million, followed by Bitbns which saw an overall decrease of 41.29% over the past ten days.
Many payment processing partners offering Unified Payments Interface (UPI), have severed all ties to crypto exchanges, in addition to the harsh crypto tax laws.
Related: Coinbase will invest in Indian cryptocurrency and Web3 amid clarity around tax regulations
Coinbase had to temporarily suspend its crypto payment option on the same day it launched its Indian crypto trading services. After a warning by the government, payment processors like MobiKwik cut ties to WazirX or other crypto exchanges.
Statement of NPCI, 7 April 2022. National Payments Corporation of India, in response to recent media reports about the purchase of Cryptocurrencies using UPI would like to clarify that there is no crypto exchange using UPI. Please see attached document pic.twitter.com/lGTcaSLKeC
— NPCI (@NPCI_NPCI), April 7, 2022
Surprisingly, crypto taxes are based on gambling laws. However, fantasy sports and gambling apps in the country have full accessibility to all forms payment integration, including UPI.
Coinbase has stopped UPI service in India within days of the NPCI statement. This is not a new problem. Indian exchanges also have a payment service issue since 2018. Strange fact: Crypto exchanges are being alienated while actual gambling apps receive proper payment service support.
— Aditya Sing (@CryptooAdy), April 10, 2022
Many crypto community stakeholders have warned that impractical tax measures, as well as additional restrictions on crypto trading, would be more harmful to the country’s thriving crypto economy. The early signs are already visible.