Early winter for Indian crypto exchanges as trading volumes slump, users flock to foreign exchanges
Winter has come early for Indian cryptocurrency exchanges, which are experiencing a slump in the value of transactions as investors flee to overseas exchanges after the implementation of a 1 per cent tax deducted at source (TDS) on July 1.
“The new TDS provisions which has kicked in from July 1 has definitely caused some heartburn across the crypto community in India. As a kneejerk reaction, it seems that people are moving to foreign crypto exchanges,” said Shashi Mathews, a partner at the law firm IndusLaw.
Data sourced from AppTweak and compiled by Moneycontrol shows that in January, Indian domestic crypto exchanges including CoinDCX, Coinswitch, Zebpay and WazirX saw over 5.5 million application downloads while international exchanges including the likes of Kucoin, Binance and FTX had over 525,000 downloads.
In June, however, international exchanges reported upwards of 451,000 downloads while Indian exchanges reported a little over 756,000 app downloads, sharply lower from January. Since the additional 1 percent TDS kicked in from July 1, whether the trend continues remains to be seen.
“It is too early to comment on a trend as of now as we are just a few days into the month. The lower volume can also be attributed to weekends, which has been a trend in crypto. CoinDCX has also been focused on launching TDS-friendly products. Recently, we launched CoinDCX Earn which has been seeing great adoption,” said Minal Thukral, executive vice-president of growth and strategy at CoinDCX.
Transactions slump
The fall in the number of Indian cryptocurrency application downloads comes at a time when the overall value of transactions has fallen steeply.
For example, WazirX, on which trading shot up to a record $566 million on October 28,
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