India’s Heavy Crypto Taxes Causes a 95% Drop in Trading Volume

India's crypto traders are struggling due to a heavy tax that has slowed digital money trading. CoinDCX, once valued at $2 billion, has felt this impact.

Crypto trading is growing worldwide. Governments are watching closely and setting taxes and rules for it. 

India is a big player in crypto. But a tough tax has hurt its growth, making trading and innovation harder.

India started a 1% tax on crypto trades 16 months ago. The goal was to track crypto buying and selling, not make money for the country. 

But the outcome? Trading in India dropped. 95% of traders went to foreign platforms, harder for officials to watch. CoinDCX's CEO, Summit Gupta, hopes the government will reduce the tax soon. Gupta said, "The tax was for tracking trades, but that's failing now."

Because of this tax, many market players left India's crypto markets. High costs scared them away. Even as Bitcoin's price rose globally, India's platforms didn't grow much.

India now wants global rules for digital money with help from big organizations. Gupta thinks there might be clearer rules by 2025, after India's 2024 elections. The Finance Ministry didn't comment on this.

CoinDCX got $135 million in funding last year. Before the tax, it was valued at $2.15 billion. Now? Their earnings are just one-third of what they were before the tax. The company even had to let go of 12% of its workers in 2023. They now have about 550 workers. Yet, CoinDCX has enough money to run for five more years.

Despite the challenges, India is still adopting crypto in different ways. Chainalysis says India got digital assets worth $250 billion recently, only behind the US's $1 trillion.