New Delhi: So far, over 115 million Indians have invested in cryptocurrencies in the country, according to an industry estimate by Seychelles-based cryptocurrency exchange, KuCoin. By 2030, the total value of investments in cryptocurrencies from India will cross $241 million (approx. 1,900 crore), said the survey published on Tuesday.
Cryptocurrency investments in India have taken a hit, ever since the central government announced a 30% capital gains tax for all profits made through trading of cryptocurrency tokens. The tax rate, which came into effect from 1 April, applies even if an individual’s income from crypto trades, which are classified as ‘virtual digital assets’, is below the non-tax limit. 2.5 lakh in earning per year.
Subsequently, Indian users still trading cryptocurrencies face a 1% tax deduction at the source (TDS) rate for any crypto token purchase, which is similar to that of centralized crypto exchanges such as WazirX and CoinDCX, among others. is done in the middle. 10,000.
Ever since the new tax regime on crypto trading came into force, there has been a marked drop in trading volumes on popular Indian exchanges. According to data from cryptocurrency market research firm Crabaco Global, daily average trading volume on WazirX fell 48% sequentially – from $47.18 million in March this year to $24.39 million in April.
On CoinDCX, daily average trading volume fell 28% sequentially from $13.11 million in March to $9.38 million in April.
The trading volume took an even bigger blow after the TDS rule on crypto trading came into effect from July 1. On WazirX and CoinDCX, daily average trading volume fell 71% and 77%, respectively, from $9.68 million per day in June to $2.81 million on WazirX in July, and from $7.79 million per day on CoinDCX to 1.82 million in the same period. Million dollars done.
KuCoin’s survey data, extracted from a sample size of just over 2,000 individuals, reflects this to some extent. While 67% of all crypto investors in India were willing to invest more in crypto tokens in the December 2021 quarter, the figure dropped to around 20% by the June quarter.
KuCoin’s survey further states that nearly a third of all crypto investors are concerned about government regulations in cryptocurrencies that are restraining their investments.
On 23 August, Mint reported that crypto investors operating in the country are shifting their investments to global exchanges, such as Binance, US-based Kraken and KuCoin, in order to bypass the TDS regulation on crypto trades. While India mandates tax deduction, the regulation does not specify whether it is applicable only on Indian exchanges or on global platforms as well.
However, investments made through global exchanges have raised concerns about the possibility of money laundering through such platforms. These concerns were heightened with the crackdown on Indian cryptocurrency platforms by the Enforcement Directorate, the law enforcement agency of the Ministry of Finance.
According to industry experts, the major concern is the paucity of Know Your Customer (KYC) data and traceable information on global platforms, though global exchanges have ensured that they comply with all necessary laws of the land to offer their services. comply with. Indian users.
India remains an attractive market for cryptocurrency exchanges. An April 5 report by crypto exchange Gemini stated that Indians are the largest first time cryptocurrency adopters in the world, with more than half of the first time crypto investors in the world originating from India.
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