Due to unfriendly local restrictions, some of Indian largest cryptocurrency exchanges are facing a terrible market winter.
Price drops, the impending cryptocurrency taxation scheme, and the inability of consumers to move money into exchanges have all hampered Indian exchanges’ efforts to expand.
WazirX, founded in March 2018 by Indian computer scientist Nischal Chetty, has stated that it is focusing solely on hiring necessary personnel and has reduced all other expenses in light of the present bear market. If any present employees depart, the remaining employees must take on extra responsibility. Positions were filled almost promptly prior to the current crypto winter.
Rivals Unocoin and BuyUcoin are likewise tightening their belts to compete with Coinbase Global, Crypto.com in Singapore, and, most recently, Bitpanda in Austria. According to UnoCoin’s CEO, the company is lowering costs and only employing when necessary, similar to many other companies in the market.
Not long ago, cryptocurrency was booming in India, with full-page newspaper adverts featuring gushing Indian celebrities discussing the merits of investing in crypto. However, Indian markets now face the extra threat of multiple government-imposed taxes drying up any remaining domestic liquidity.
In an attempt to legitimize the industry, Finance Minister Nirmala Sitharaman recommended a 30% tax on all cryptocurrency income in her budget address for the fiscal year beginning April 2022, a setback to many crypto traders.
A 1% source tax will be levied on all crypto transfers above a specific threshold, and the potential of adding value-added tax to the mix is now being debated in both houses of Parliament.
Furthermore, exchanges such as Coinbase were affected by the shutdown of the United Payments Interface in mid-April of this year, which stopped clients from topping up their exchange accounts with cash.
Prime Minister Narendra Modi has frequently emphasized the importance of technology and creativity in realizing his country’s vision. This foresight may be shown in India’s leadership in the digital payments area, which launched the United Payments Interface in 2016.
In May, the central bank outlined a staged approach to dealing with a Central Bank Digital Currency, although it has yet to ratify a regulatory framework for cryptocurrency.
Following the Supreme Court’s repeal of a blanket crypto ban in March 2020, crypto enthusiasts believed that the Indian government’s stance on crypto was motivated by its perception of private cryptocurrencies as a threat to its national currency and a vehicle for money laundering and illicit activity.
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