The Indian cryptocurrency market is still reeling from the economic downturn, and it seems the situation will not improve anytime soon. That is because of the sudden slowdown in trading volumes, thanks to the new one percent TDS levied by the government that has aggravated the dip in average daily transactions of crypto tokens, such as Bitcoin and Ethereum, in India. Also Read - BGMI ban: Here is the list of apps India has banned before Battlegrounds Mobile
Major crypto exchanges, such as WazirX, CoinDCX, and Zebpay reported a staggering decline in daily transaction volume from around $10 million to $5.6 million in a few days since the implementation of the new tax regime. BitBNS and CoinDCX said the drop in transactions on their platforms was 37.4 percent and 90.9 percent, respectively. WazirX reported a nosedive of 82 percent in daily average transactions, according to crypto research and consulting firm Crebaco. Also Read - Meta, Google, Amazon want to change how you measure time: Is it really needed?
The new 1 percent TDS on cryptocurrency transactions puts a dent in profits earned by exchanges, which began paying a 30 percent tax to the government as a part of the rule that was formulated in April. Also Read - How to merge two or more videos on iPhone
Too early to say anything?
The crypto exchanges, however, are not downcast about the declining transactions, saying it would be too early to measure the impact of the one percent TDS. The exchanges said since transactions are typically low on weekends, it will take some time to gauge the impact. Experts, on the other hand, are not very hopeful about an imminent uptick in the transactions, even if the market shows signs of improvement.
The current economic recession and Federal Reserve’s hawkishness have forced the crypto tokens to stay largely in the red, even though they see occasional jumps. According to Economic Times, the grey market will continue to flourish because of the ongoing crisis in global macroeconomic conditions. While some crypto exchanges seem resourceful enough to endure the adverse waves, some exchanges have had to shut shop.
Hyderabad-based crypto exchange Vauld, which is funded by Coinbase, recently halted all transactions after it sacked a major chunk of its workforce to streamline business goals. Other crypto exchanges are considering diversifying into other areas to absorb the impact and stay afloat.