Even though the same services are accessible for gambling and fantasy sports platforms, payment service providers have severed relations with major crypto exchanges.
Just ten days after the tax rule went into effect, new data on the trading volume of Indian crypto exchanges shows a dramatic drop in trading behaviour among Indians. Despite several stakeholders and exchange operators warning about the negative consequences, India’s new 30% crypto tax legislation went into effect on April 1.
According to a report provided by Indian blockchain analytic business Crebaco, trading volume on prominent Indian crypto exchanges has dropped by as much as 70% in the last ten days.
WazirX, India’s largest cryptocurrency exchange, saw its trade volume drop from $47.8 million on April 1 to $13.2 million on April 10. CoinDCX’s trading volume fell from $12.16 million to $5.76 million in the last ten days, while Bitbns’ trading volume fell by 41.29 percent.
Many payment processing partners who offer Unified Payments Interface (UPI) accessibility have discontinued relations with crypto exchanges, in addition to punitive crypto tax rules directly influenced by India’s gambling laws. Only a day after launching its crypto trading services for Indians, Coinbase had to stop the crypto payment option. Following a recent warning from the authorities, payment processors like as MobiKwik have suspended relations with WazirX and other crypto exchanges.
Statement by NPCI as on 7th April 2022. With reference to some recent media reports around the purchase of Cryptocurrencies using UPI, National Payments Corporation of India would like to clarify that we are not aware of any crypto exchange using UPI. Please see attached document pic.twitter.com/lGTcaSLKeC
— NPCI (@NPCI_NPCI) April 7, 2022
Even if cryptocurrency taxes are predicated on gambling legislation, fantasy sports and gambling apps in the country have complete access to all types of payment integration, including UPI.
Coinbase disabled UPI service in India few days after NPCI statement.
This is not new, Indian exchanges have also been facing payment service problem since 2018.
Weird fact – Actual gambling apps get proper payment service support while crypto exchanges are being alienated.
— Aditya Singh (@CryptooAdy) April 10, 2022
Many members of the crypto community have warned that these ineffective tax measures and new limits on crypto trading will wreak havoc on the country’s booming crypto sector, and the early repercussions are already obvious.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
