New trading volume data from Indian cryptocurrency exchanges shows a sharp drop in trading practices by Indians just 10 days after the introduction of a new tax rule. The new 30% cryptocurrency tax rule in India went into effect on April 1, despite many advocacy groups and exchange operators warning of its negative impact.
A research data report provided to Cointelegraph by Indian blockchain analytics firm Crebaco shows that trading volume across major Indian cryptocurrency exchanges has fallen by as much as 70% over the past 10 days.
Trading volume on WazirX, India’s top cryptocurrency exchange, 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 the harsh cryptocurrency tax laws directly inspired by Indian gambling laws, many payment processing partners that offer Unified Payment Interface (UPI) accessibility have also severed ties with cryptocurrency exchanges.
Recently, Coinbase had to suspend the cryptocurrency payment option just a day after launching its cryptocurrency trading services for locals. 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
NPCI statement as of April 7, 2022. Referring to some recent media reports about buying crypto with UPI, National Payments Corporation of India would like to clarify that we are not aware of any crypto exchange with UPI.
Interestingly, although cryptocurrency taxes are based on gambling laws, fantasy sports and gaming 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 – Legacy gambling apps get decent support from payment services while alienating crypto exchanges.
— Aditya Singh (@CryptooAdy) April 10, 2022
Coinbase disabled UPI service in India just days after the NPCI statement.
This is not new, Indian exchanges have also been struggling with payment service problems since 2018.
Curious Fact: Gambling apps will get decent support for payment services while cryptocurrency exchanges will be isolated.
Many stakeholders in the crypto community have warned that these impractical tax measures and additional restrictions on cryptocurrency trading would further damage the country’s thriving digital economy, and the first effects are already being seen.
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