Indian crypto exchanges are struggling to survive amidst stringent tax regulations and a decline in trading volumes. Since February 1, 2022, the Indian government has imposed a 30% tax on crypto profits and a 1% tax deducted at source (TDS) on all transactions, causing local industry leaders to worry about the future of the industry in the country.
Tensions began to escalate as trading volumes plummeted by over 70% within the first ten days after the taxes were implemented. This was further exacerbated by a “shadow ban” that restricted banking access to crypto exchanges, hindering their operations.
With the ongoing decline in the local crypto market, Indians moved more than $3.8 billion in trading volume from local exchanges to international platforms. However, some hope remains as India, being the president of the Group of 20 (G-20) in 2023, is working towards framing globally coordinated rules for the crypto sector.
Despite the uncertain atmosphere, prominent Indian crypto platforms like CoinDCX, CoinSwitch, WazirX, BuyUCoin, ZebPay, and Giottus, have adopted various survival strategies. CoinDCX and Okto co-founder Neeraj Khandelwal revealed that the company has a four-year financial runway and is investing in innovation and technology. WazirX, on the other hand, has resorted to cutting costs and renegotiating contracts while maintaining its focus on the crypto market.
CoinSwitch removed “Kuber” from its name and shifted from being a crypto exchange to a crypto investment platform, making it possible for users to invest in other assets like fixed deposits, mutual funds, and Indian stocks. ZebPay and BuyUCoin are focusing on user growth and exploring global expansion plans, respectively.
Giottus, a lesser-known Indian exchange, is concentrating on operational excellence, cutting marketing costs, and reducing risks associated with exchanges. The company also plans to provide customers with proof of reserves, adding a layer of transparency to its operations.
Despite the many hurdles facing the Indian crypto market, industry players are determined to survive and face the challenges head-on. While the tax regime remains a significant point of contention, the hope for a potential boom in the crypto market, fueled by India’s role in framing global crypto policies, keeps the industry driven.
Source: Coindesk
