On 1 April, India’s previously approved regulatory law on cryptocurrencies came into full force, bringing about a 30% tax on all profits made from digital assets. The majority of the population was rather displeased with this decision.
As expected, the number of cryptocurrency transactions has gone down significantly, with some exchanges losing three-fourths of their previous volumes, Coindesk confirms. The highest falls were experienced by WazirX (losing 72% of their volume), ZebPay (59%), CoinDCX (52%), and BitBns (41%).
According to Sidharth Sogani of Crebaco, a cryptoanalysis company, this trend should continue for the foreseeable future:
“April 1, 2, and 3 were holidays. Since then, volumes are continuing to fall. [...] It can go further down or sideways but it is unlikely to go back up. It is clear that the new tax has impacted the market negatively. The government must look into this and because there is no way to stop this (crypto), the government should embrace the technology.”
While the new law brings about much-needed clarity for the digital assets market, the added 30% tax seems to have brought negative repercussions. The sad news is that the Indian government is rather against the adoption of crypto, which unfortunately means it is unlikely for them to reconsider the law.