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The latest data on the volume of exchanges traded in India shows a significant decline within 10 days of the tax regulation taking effect. India's 30% tax regulation was introduced on April 1, despite warnings from stakeholders and exchange operators about the adverse impact of the regulation.
A data research report by blockchain analytics firm Crebaco shows that the number of transactions on leading exchanges in India has dropped by up to 70% in the last 10 days.
Trading volume on WazirX, the largest exchange in India, fell from $47.8 million on April 1 to $13.2 million on Sunday. CoinDCX's trading volume also fell from $12.16 million to $5.76 million. It was followed by Bitbns, which saw a 41.29% drop in the last 10 days.
This harsh cryptocurrency tax law was introduced based on India's gambling laws. In addition, many transaction processing partners that provide access to the Unified Payment Interface (UPI) have also stopped cooperating with these exchanges.
Coinbase recently stopped cryptocurrency payment options just days after it expanded its services into India. Meanwhile, transaction processing companies such as MobiKwik have also severed ties with WazirX and other exchanges following a recent warning from the government.
However, even though the cryptocurrency tax is built on a betting tax, virtual sports and gambling apps in the country still have access to all forms of payment integration including UPI.
Many stakeholders in the cryptocurrency community have warned that these taxes will not work. Imposing restrictions on cryptocurrency trading will have a negative impact on the country's growing cryptocurrency economy, and we can see the first consequences already happening.
