Trading volumes in India plummet after recent new crypto tax.

Trading volumes in India plummet after recent new crypto tax.

Advertisements

Advertisements

Trading volumes on major Indian stock exchanges have fallen sharply since30% income tax is applied in April. Moreover, with the introduction of another new tax which came into force on 1er July, the industry now faces additional downward pressure. As a result, trading volumes on major platforms fell by around 95%.

Trading volumes on Indian exchanges are falling.

The daily trading volume on the local cryptocurrency exchange WazirXfell more than 63% to $5.36 million on July 1, from $14.53 million the previous day. This according to data collected by nomics.com.

In particular, trading volumes on platforms such as, CoinDCX and Zebpay dropped about 95% during the same period. Based on the current trading volume, the platform predicts that the exchange can only generate transaction fee income of $1,000 to $3,000 at most.

The sharp decline in business activity stems from the latest tax 1% imposed by the Reserve bank of India (RBI) on the sale and transfer of crypto assets above $127. As the major cryptocurrency fell below the key $20,000 level, general interest in these assets dropped sharply.

Therefore, scholarships are under enormous pressure in a context of a sharp drop in transaction volumes. For Indian platforms, the infamous flat tax of 30% on all crypto income went into effect on April 1, and things got even worse. According to data from popular analytics platform Crypto India, 3 months after the entry into force of the sweeping tax law, their trading volumes have dropped by 90-95%.

To discover: Binance will help the regulator of Cambodia to develop the next local regulations on cryptocurrencies.

Indian stock exchanges also affected by liquidity problems

Liquidity has been a major issue for several global exchanges, especially Indian exchanges due to unfavorable government laws. On Monday, July 4, the indian stock market Vaultsupported by Peter Thielannounced that it was stopping withdrawals.

Vault announced that he was faced with serious liquidity problems after the collapse of Terra, with withdrawals exceeding $200 million. The outsized influence of these cryptocurrency exchanges raises major doubts about the ability to protect user funds.

Furthermore, the CEO of Binance, Changpeng Zhaowarned that investors should not choose exchanges that require venture capital funding to support themselves. These platforms attract crypto deposits from customers with excellent APY. However, in extremely difficult conditions, they are often unable to protect their clients.

Bonus: The European Central Bank will issue a warning to Eurozone countries on cryptocurrency regulation.

Leave a Comment

Your email address will not be published.