Trading volumes on major Indian cryptocurrency exchanges have declined by 70% after a new transaction tax came into effect on July 1.
What Happened: Data shows that exchange volumes plummeted following the imposition of a 1% tax deducted at source (TDS) and 30% income tax on cryptocurrency transactions.
The 1% TDS is applicable to every digital asset transaction, including NFTs and other types of transactions on public blockchains.
Leading Indian cryptocurrency exchanges such as WazirX, Zebpay, BitBNS, and CoinDCX saw their average trading volumes decline from over $9.5 million per day to around $5 million at the time of writing.
Indian Crypto exchange's trading volume have plunged by 90-95% , 3 months after new crypto laws became applicable.— Crypto India (@CryptooIndia) July 4, 2022
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 taxation and the government’s efforts to regulate the industry is a very positive step and a welcome move,” wrote CoinDCX CEO Sumit Gupta on Twitter.
“However, imposing such high taxation on an asset class and an industry that’s just started to take off would do more harm than good. ”
Price Action: As per data from Benzinga Pro, the crypto market rose 5.60% over the last 24 hours. Bitcoin BTC/USD was up 6.18%, while Ethereum ETH/USD and Dogecoin DOGE/USD saw increases of 9% and 4.45% respectively over the same period.
Photo via insta_photos on Shutterstock
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