Binance has seen an increase in the number of Indian users on the cryptocurrency exchange after the Indian government started taxing crypto transactions. Meanwhile, daily trading volume on some major India-based cryptocurrency exchanges has dropped by more than 90% since the new tax rules came into force.
Binance sees record number of Indian users
The number of Indian user registrations on global crypto exchange Binance has increased since the 1% tax deducted at source (TDS) came into effect in July, Bloomberg reported on Tuesday.
Binance app downloads in India rose to 429,000 in August, the highest this year, the publication said. In contrast, daily trading volume on several major Indian cryptocurrency exchanges has reportedly dropped by more than 90% since the implementation of 1% TDS.
Commenting on the new tax, Rohan Misra, CEO of SEBA India, a subsidiary of Switzerland-based SEBA Bank AG, said:
It is not clear whether the latest tax regulation will impose a 1% withholding tax on transactions involving futures into the crypto space.
1% TDS will be levied on top of new 30% tax on profits from crypto assets. Moreover, crypto trading losses cannot be offset against income. Indian crypto exchanges are also facing limited support from the banking system, making it difficult for users to move funds in and out of trading platforms.
Another foreign-based cryptocurrency exchange, FTX, has seen an increase in app downloads since January but not since July. The exchange saw around 40,000 downloads in India in January, around 96,000 in July and 52,000 in August.
Nasdaq-listed crypto exchange Coinbase Global Inc. saw its app downloads in India drop to 16,000 in August from about 31,000 in June. Coinbase tried to expand its operations in India in April but quickly ran into problems with the UPI payment system.
While downloads of the Binance app are on the rise, some major Indian cryptocurrency exchanges are seeing a decline in the number of user registrations, the publication reported. Downloads of Indian crypto exchange Coindcx’s app fell to 163,000 in August from 2.2 million in January, data from market intelligence firm Sensor Tower showed.
Another Indian crypto exchange, Wazirx, saw its monthly app downloads drop from 596,000 in August to 92,000 in January. The exchange recently had a public dispute over ownership with Binance CEO Changpeng Zhao (CZ), who encouraged Zhao to transfer Wazirx users to Binance. Wazirx’s bank accounts were frozen by India’s Enforcement Directorate (ED) in early August but were not frozen earlier this week.
Regarding Binance starting to collect transaction tax from users in India, a spokesperson for the exchange told the news outlet that the company is “currently monitoring the situation and will make further announcements in due course.”
What do you think of Indian cryptocurrency investors choosing to use Binance? Let us know in the comments section below.
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