Crypto startups are betting on rewards, cashbacks, ETFs
NEW DELHI : Cryptocurrency and investment startups are betting on cashbacks, rewards, fixed interest investment schemes and exchange-traded funds (ETFs) to keep trading volumes from falling drastically as the government enforces its new tax deducted at source (TDS) rule.The government had announced a 1% TDS on crypto transactions effective 1 July.
For instance, Indian cryptocurrency exchange, CoinDCX, offers ‘Earn’, a passive income scheme that claims to offer up to 13% interest on a user’s crypto holdings. This scheme is similar to the concept of crypto staking in the web3 space, wherein a user can hold cryptocurrency tokens belonging to a proof-of-stake blockchain network. In such a network, the blockchain validates new tokens in the network based on the volume of tokens held by users. The greater the volume of tokens held by users, the higher is the percentage of returns earned by them.
Minal Thukral, executive vice president of growth and strategy at CoinDCX, said Earn is a part of “TDS-friendly products" that the exchange plans to launch going forward, and “has been seeing great adoption" since it was introduced on 26 May.
Similarly, early-stage exchange, weTrade, which opened for users in May, is looking to target new users and investors with rewards for trading in crypto tokens. These include a 1% ‘cashback’ offer every time a user sells tokens on the platform, which covers the TDS charges. Users also receive 2% cashback every time they buy tokens.
Beyond crypto exchanges, traditional financial services are also joining the fray.
For instance, US investment firm Vested Finance, which offers services in India as well, has introduced an exchange-traded fund (ETF) for bitcoin. Viram Shah, chief executive of Vested
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