Indian Crypto Trading Volumes Plummet After New TDS Tax Rule Takes Effect

July 5, 2022 Bitcoin.com

Indian crypto trading volumes slump following hefty taxes

July 5, 2022 Coin Telegraph

BitBNS

Indian crypto traders may be giving up since they must now factor in a 30% income tax and a 1% tax per transaction on crypto trades, forcing exchange volume to plummet.

Trading volume on three major Indian crypto exchanges plummeted 72.5% on average since July 1, when a 1% tax per transaction was enforced in the country.

The Tax Deducted at Source (TDS) came into effect on July 1 and appears to have negatively affected traders as exchange volumes dropped from 37.4% on BitBNS and 90.9% on CoinDCX by July 3. Volumes have stabilized slightly since hitting lows but are still down 56.8% on average, according to CoinGecko.

Indian YouTube channel Crypto India tweeted on July 4 that exchange revenues, based on a 0.1% trading fee, are abysmal due to the low volume levels. At the trough of volume levels, WazirX, CoinDCX, and Zebpay took in a combined $21,649 per day.

Indian Crypto exchange's trading volume have plunged by 90-95% , 3 months after new crypto laws became applicable.

Based on current volumes - Exchanges are only able to generate trading fee revenue of $1000 to $3000 Max.

Bitbns seems to be still doing well.

Tough times ahead. pic.twitter.com/KNDbea9BCn
— Crypto India (@CryptooIndia) July 4, 2022

For now, crypto traders like Mumbai’s Shounak Shetty are also hurting. Shetty told Economic Times on July 4 that he believes the TDS and the 30% income tax on cryptocurrency trades in India will be detrimental to the talent base in the South Asian nation. He said,

“Like other traders, I am trying to figure out if it’s possible to stay profitable on Indian exchanges. This will lead to another brain drain of professional traders to other countries like Dubai that are more welcoming.”

WazirX’s Policy Analyst Anuj Chaudhary explained in the June 30 episode of The WazirX Show on YouTube that the 1% TDS is levied on “digital assets whether it’s NFT, crypto assets, metaverse, or any sort of transactions happening on top of public blockchains.”

The tax will be in effect for three months as a test to determine the impact it has on the market. While trading volumes are low now, policymakers want to see its results for a longer timeframe.

Only gift cards used to obtain goods or get a discount, mileage points, reward points, and loyalty incentives without monetary considerations, and subscriptions to websites, platforms, or applications are exempt from the tax.

Chaudhary’s counterpart on the show, Muthuswamy Iyer, Head of Legal at WazirX, accurately predicted that the TDS would negatively impact the high volume, high-value traders on Indian platforms. He added that he believes the TDS would also dissuade newcomers and low-frequency traders from gaining crypto exposure.

The average daily transaction volume between WazirX, Zebpay, BitBNS, and CoinDCX in June was about $9.6 million per day, but that has fallen to about $5.6 million as of July 4.

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Why did WazirX token (WRX) jump 30% after India announced its big crypto tax?

February 2, 2022 Coin Telegraph

Altcoin

The Indian government said that it does not treat cryptocurrencies as illegal, clarifying that its transactions remain in a grey area.

WazirX exchange’s native token, WRX, benefited the most from India’s latest U-turn on crypto this week.

WRX’s price jumps on India tax news

WRX’s price surged nearly 30% to over $1, hitting a three-week high after the Indian government had announced a new tax regime for the regional crypto sector, reversing entirely from its earlier strict stance that even contemplated an outright ban on the emerging industry.

$WRX - Up on news! https://t.co/Ln504eUZzm pic.twitter.com/zN3pW84DPY
— Yo! Crypto ₿ (@YoCrypto) February 1, 2022

In her budget speech on Tuesday, Finance Minister Nirmala Sitharaman said that the government plans to tax the income from trading cryptocurrencies at 30%, which, while among the highest rates in the world, also means that digital assets are recognized in India and may soon gain legal status.

WRX’s price jumped after Sitharaman’s speech, which was probably due to its association with an India-based crypto exchange, WazirX. The WRX token serves as a utility token on the platform, benefitting users with trading fee discounts and access to new token airdrops.

Another 250% rally ahead?

Utility tokens typically derive their value from speculations that their adoption would grow in tandem with the growth of their platform, one that is no longer in regulatory limbo.

Javon Marks, an independent market analyst, predicted further price booms in the WRX market, noting that the WazirX token could climb toward $3.80 from its current $1 levels. At the core of his bullish analogy was a technical setup, as shown in the attached chart.

*WRX/USD three-day price chart. Source: Javon Marks, TradingView*

In detail, WRX’s ongoing price boom had its price break above a multi-month downward sloping resistance trendline. Marks noted that the breakout “technically” positions the WazirX token to rise by another 252% in the coming sessions to its April 2021 resistance targets.

“As long as WazirX holds this break, this target will remain pushable,” the analyst tweeted on Wednesday.

The statement also surfaced as the crypto market, on the whole, remained in a state of turmoil after a depressive January performance. WRX itself dropped more than 30% into the month, mirroring similar moves across the top-ranking crypto assets, including Bitcoin (BTC), which tanked nearly 18% in the same period.

The interim pullback scenario

WazirX’s day-to-day correlation with broader crypto market trends, however, puts WRX at risk of bearish continuation. It is primarily because the catalysts that played a key role in pushing the digital assets lower in January 2022 — the United States Federal Reserve’s hawkish turn — remain intact.

Additionally, WRX’s price faces a technical resistance confluence that may limit its recovery bias in the sessions ahead. Specifically, a combination of price ceilings, including a descending triangle’s upper trendline, have already been capping the WazirX token’s upside attempts.

*WRX/USD daily price chart featuring descending triangle setup. Source: TradingView*

Other resistance levels include a 50-day exponential moving average (50-day EMA; the red wave) and a 200-day EMA (the blue wave). A pullback upon testing them risks dropping WRX’s price to the descending triangle’s lower trendline near $0.75.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

$2.5T crypto market will not wait for nations to onboard: WazirX CEO

December 29, 2021 Coin Telegraph

Coin Telegraph

“The question for every nation is, do they want to participate and get a share of this pie,” says WazirX CEO Nischal Shetty.

Nischal Shetty, an Indian entrepreneur and CEO of crypto exchange WazirX, envisions a race between countries to launch their local versions of central bank digital currencies in the coming year.

Speaking to Cointelegraph, Shetty said that the year 2022 would be an extension of the ongoing discussions around crypto regulations, exchange-traded funds (ETF) and the emergence of the metaverse:

“We’re optimistic that we’ll get regulatory clarity and see institutional participation fuel retail adoption. We also expect to see more metaverse projects making an entrance.”

Shetty pointed out that the crypto industry today — directly or indirectly — employs about 50,000 people in India, which, according to Nasscom research, is expected to grow two times faster with the potential to have created over 800,000 jobs by 2030.

Acknowledging the delays in crypto regulations across the globe, Shetty told The Economic Times that an overnight regulation might harm the progress of the ecosystem and leave open loopholes for bad actors:

“There is a $2.5-trillion market out there, and it is not going to wait for any nation to come on board. I’ve been tweeting ‘#IndiaWantsCrypto’ for over 1,000 days with the sole objective of having crypto regulation in India.”

Day 1000

What a milestone for Indian Crypto!

With #IndiaWantsCrypto my mission has been:

- Bring positive crypto regulation in India
- Spread right information about Crypto

Lakhs of people have joined this campaign

Let’s continue our mission

Jai Hind #IndiaWantsCrypto
— Nischal (WazirX) ⚡️ (@NischalShetty) July 28, 2021

Discussions around crypto were prevalent in India this year as Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman cited the need for crypto regulations. In addition, the winter season of the Indian Parliament introduced a crypto bill that sought a ban on “private” cryptocurrencies.

“The question for every nation is: Do they want to participate and get a share of this pie?” asked Shetty. He also predicted that global participation in crypto would go from 150 million to 400 million people if the coming year follows a similar growth trajectory of 2021.

Shetty highlighted that the nonfungible token (NFT) buying spree might slow down in 2022 as investors attempt reselling through secondary markets, adding:

“Web3 will open the gates to innovation and more startups in India. Along with the rise in NFTs, it will play a huge role in promoting the creator economy of India.”

Crypto exchange WazirX led numerous marketing efforts to educate Indian investors about cryptocurrencies and launch transparency reports and policies to add credibility to the ecosystem. Shetty believes that spreading the right information and busting misinformation will expedite crypto adoption in India, concluding:

“Cointelegraph is doing a phenomenal job at spreading education and awareness around crypto among the masses. I wish all the readers a very happy, crypto-full new year ahead!”

Local reports from early December suggested that the Indian government would regulate the crypto sector instead of imposing an outright ban.

According to Indian news outlet NDTV, a cabinet note regarding the proposed crypto bill contained suggestions to regulate cryptocurrencies as crypto assets, with the Securities and Exchange Board of India overseeing the regulation of local crypto exchanges.

However, NDTV reporter Sunil Prabhu said that the government of India will not consider mainstream adoption of cryptocurrencies as legal tender:

“[Cryptocurrency] as a legal tender will not be accepted. That is a clear no. I think that that is what even the prime minister in his deliberations at that meeting made absolutely clear to ensure that does not take place.”

WazirX