India blocked access to nine foreign cryptocurrency exchanges last month. So, crypto investors are flocking back to domestic exchanges. Will crackdown on offshore exchanges help desi crypto platforms?
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A th in the prolonged crypto vter is on the horizon domestic cryptocurrency platforms are seeing a notable search in Daily transactions and user registrations in deposits following the government’s recent Crackdown on Offshore platforms in late December the cryptocurrency market cooled off in 2022 when the Indian government imposed tax
On digital assets the government introduced a 50% tax on crypto gains and a 1% tax deducted at source on crypto transactions the Ministry of Finance had issued show cause notices to nine foreign cryptocurrency exchanges for non-compliance with the anti-money laundering legislation these included big ticket Virtual digital asset
Platforms like binance and qoin the result volumes are growing again this sudden bullishness in the domestic crypto Market all allowed platforms like vazer X and coin dcx to see a 2,000% increase in deposits over 2 weeks back in 2022 the new taxation regime reportedly drove a large number of Indian traders to Offshore
Exchanges a report by Think Tank Sia Center revealed domestic exchanges lost trading volumes worth around $3.8 billion to Offshore bosses after the government introduced tax on virtual Assets in budget 2022 but those crypto investors are now flocking back to domestic exchanges vazir Rex and mudre estimated that
Roughly 70% of their fresh inflow came from binance which is one of the world’s largest crypto exchanges coin DX’s fresh inflow from binance was estimated at around 40% industry insiders say the Crackdown on offshore crypto platforms has effectively leveled the playing field for domestic crypto exchanges I
Think uh this is a step in the right direction what is going to happen is that uh foreign exchanges were making use of regulatory and Taxation Arbitrage uh which means that Indian exchangers were who were following the raw of the land were being unduly punished for being uh you know legal for
Doing all everything that is legal so this is the step in the first Direction in the right direction what they saying is that you will have to actually follow Indian tax rules if you’re servicing Indians no matter where you are operating out of uh so this is the first
Step the Second Step would be actually to make ensure that ex those exchanges also actually pay the TDS that the government has actually mandated for all crypto transactions business standard had earlier reported that domestic crypto exchanges are exploring strategies to attract investors who have migrated to Offshore crypto platforms but the
Endeavor seems needless now Apple has removed apps of the nine foreign crypto exchanges from its app store in India after they were flagged illegal in the country several offshore crypto apps were also removed from the Google Play Store on 14th of January this month but is this bullishness in the Indian crypto
Market only a brief relief or more long-term gain awaits in short term yes there is a very good inflow but I seriously feel that we we as IND exchanges though we should be happy about this that is happening we should still be working towards how to get users through our products and service
Uh not by this way we don’t want to have a scenario where the users are coming to the platform uh because they’re forcefully coming back right um I mean so I I’m not going to say I’m not really happy but yeah we are happy that the users acquisition is
Is growing the volumes are growing but uh we also understand the fact that this is not something that is good for the long-term growth of any platform the RBI has long maintained a cautious stance on cryptos later taxation of the asset class pushed Indian crypto exchanges to diversify their offerings to increase
User participation coin dcx introduced a D5 wallet called octo a def5 wallet is a decentralized non-custodial virtual wallet that stores one’s crypto assets and coin switch is in talks with the regulator to launch a wealth Tech platform offering asset classes like fixed deposits stocks and mutual funds so is diversification within and outside
The crypto ecosystem essential for long-term growth Vikram subar of crypto platform kotus believes expanding beyond the crypto ecosystem may not ensure sustained growth of the platforms and customers that is still still a lot of exploration that has to be done in the crypto ecosystem and that has to be
Offered to the customer there’s so much of opportunities left here right now leaving this and jumping into another ecosystem which is even complex Equity is not an easy ecosystem it has got a lot of regulatory intervention it has got a lot of competition that is there now handling putting your legs in two
Ecosystem which has got a lot of regulatory and competition it is just uh you know a mixture trying to kill yourself in the longer run Indian crypto players have reiterated their expectations of slashing tax rates on crypto Assets in the upcoming Union budget Raja gopal Menan of vazer X
Suggests that such a measure would help sustain the current uptic in crypto users on Indian platforms for now it appears that the Crackdown on the likes of binance has provided a shortterm but much needed relief to domestic players if you like this video share it and subscribe to business standard for more
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