Trade volumes on Indian exchanges fall as new crypto tax law comes into force

Key Takeaways:

  • Trade volumes on Indian crypto exchanges have taken a plunge since April 1
  • India's crypto law, which mandates a 30% tax on crypto gains, is partially responsible
  • Traders in the country are unable to deposit Indian Rupee on many of the exchanges
Trade volumes on Indian crypto exchanges such as WazirX, & CoinDCX continue to tumble after New Crypto tax rules became applicable on 1st April.
Trade volumes on Indian crypto exchanges have been falling since April 1. Credit: Marco Verch via Flickr

YEREVAN (CoinChapter.com) – Cryptocurrency trading volumes on Indian exchanges continue to fall due to the government’s strict taxation, data from research firm Crebaco shows.

Notably, India’s first “crypto unicorn,” the CoinDCX, witnessed a 52% drop in trading volumes in the first week of April. However, the readings later reached 74%.

The drop was higher for other players in the Indian market. WazirX, for example, lost up to 90% of its trading volume, according to data from the tracking website LiveCoinWatch.

Trade volumes on Indian exchanges fall as new crypto tax law comes into force

YEREVAN (CoinChapter.com) – Cryptocurrency trading volumes on Indian exchanges continue to be on a freefall. The nosedive began on April 1 as the new crypto tax law came into force. As CoinChapter reported earlier, the Indian Finance Ministry has levied a massive 30% tax on all cryptocurrency gains.  

https://twitter.com/CryptooIndia/status/1513760654385041408

According to the data from the research firm Crebaco, all major exchanges in the country have taken a hit. India's first crypto unicorn, the CoinDCX, registered an initial 52% drop in trading volumes in the first week of April. It subsequently shed more, taking its losses to as high as 74%.

The drop was higher for other players in the Indian market. WazirX, for example, lost up to 90% of its trading volume, according to data from the tracking website LiveCoinWatch.

 WazirX Graph

Over 50% of trade volume from Bangalore-based crypto exchange Bitbns also eroded. ZebPay, on the other hand, shed around 60%. According to estimates, the overall volume of Indian crypto exchanges is down up to 70%.

https://twitter.com/ForexMindsets/status/1513785794594443266
Trading volumes on WazirX have dropped since April 1. Credit: LiveCoinWatch

Over 50% of trade volume from Bangalore-based crypto exchange Bitbns also eroded. ZebPay, on the other hand, shed around 60%. As a result, according to estimates, the overall volume of Indian crypto exchanges is down up to 70%.

Recommended: Indian MP wins hearts after lashing out at Modi government for unfriendly crypto policy

Traders face problems making deposits on Indian Exchanges 

As the trading volumes continue to fall, traders face another problem. Many have discovered they can no longer make deposits on Indian exchanges. 

Crypto trading platform CoinSwitch Kuber disabled all deposit services for Indian National Rupee (INR) on its mobile application on Tuesday. While the company did not make any official announcement yet, several users have taken to Twitter to voice concerns over the development. 

The screenshot shows that CoinSwitch Kuber can no longer use the Unified Payments Interface (UPI) or bank cards for deposits. The UPI is an instant real-time payment system developed by the National Payments Corporation of India, a Government agency under the Ministry of Finance. 

Bank transfer routes like the National Electronic Funds Transfer (NEFT), the Real-time gross settlement systems (RTGS), and the Immediate Payment Service (IPS) also don’t seem to work. 

Slamming the unfriendly crypto policy in India, WazirX founder Nischal Shetty expressed hope that the situation would improve. 

“Regulatory uncertainty & banking issues have led to India losing out on first wave of investments. A few tweaks and India can rise to the top,” 

he said.

US-based crypto exchange Coinbase, which launched in India on April 7, also disabled the UPI payment method on its app. In a further blow, Indian payment service provider Mobikwik, which partnered with Coinbase, stopped supporting crypto trading. 

India’s unfriendly crypto policy has delivered a big blow to the crypto exchanges. Only time will show if they will manage to recover soon. 

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Indian exchanges, Trade volumes on Indian exchanges fall as new crypto tax law comes into force

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