How FTX’s Collapse Impacts Indian Crypto Industry
Crypto trading volumes in India have decreased this year. The FTX meltdown has exacerbated the problem, hurting the sentiment across crypto tokens local crypto experts are not expecting a recovery soon unless something dramatic happens in the upcoming Union Budget.
According to Experts. Indian Crypto Market suffers significantly, Indian Crypto Market has Dead since April as well Indian Trading volumes are unlikely to Recover anytime soon.
Cryptocurrency trading volumes at giant exchanges in India like WazirX, CoinDCX, and CoinSwitchKuber have fallen this year. Since the collapse of the crypto exchange FTX. Indian exchange lost around 34% to 50% of trading Volumes.
The FTX implosion is one of the largest crypto trading platforms in India. WazirX lost 97.99% of its trading volumes from the beginning of the year to Dec 22.
Crebaco CEO sidharth Sogani said:
"I don't think a lot of this recent trading volume plunge was driven by FTX the market in India has been dead since April 2022."
I didn't expect any action or recovery for the sector in India in the coming months until something big was announced in the Union Budget.
According to Rajagopal Menon WazirX's vice president of marketing. it all comes down to removing the TDS and capital gains without setoff for losses. No one is trading on Indian exchanges due to tax.
In the year 2022 Union Budget, the Indian government adds a 30% income tax on digital assets including non-fungible tokens (NFT) and Cryptocurrencies, and a 1% TDS on all transactions on transactions of 10,000 rupees.
According to Menon:
"Unless something dramatic happens in the Budget this year, we don't see a steady recovery in trading volumes anytime soon"
Indian users have not been too badly affected by FTX except for the sentiment negative sentiment around the sector got exaggerated by FTX's top crypto exchange executive told the publications person stated:
"Indian investors after TDS have transferred to Binance and not FTX because Binance had peer-to-peet(P2P) transactions, FTX dosen't if you have INR the only foreign exchange you can trade on are Binance and Kucoin."
Sogani similarly explained that the FTX meltdown hurt the sentiment across crypto tokens he added what came out, later on, has pushed the crypto industry behind by a few years.
India still has not come up with a policy on crypto. the Indian government is planning to discuss crypto regulations with the G20 countries to establish a technology-driven regulatory framework for crypto assets the country's finance minister Nirmala Sitaraman revealed the government updated parliament on the status of its cryptocurrency bill.
India's Central bank, the Reserve Bank of India (RBI) has continued to push for the banning of all cryptocurrencies as well RBi governor Shaktikanta Das recently said that the next financial crisis will come from crypto if it is allowed to grow.