India’s high tax on crypto trading slows activity

India's high tax on digital currency has resulted in a number of Indian companies moving to cheaper territories due to declining trade volumes on their platforms, Cointelegraph reports.

The country is currently levies a 30% tax on cryptocurrencies, which puts crypto taxes in the same band as gambling taxes, which are already among the highest taxes in India.

Many Indians are looking to move to the Middle East, where they have attracted firms like Binance and Coinbase.

India is home to a booming market of up to 20 million crypto investors, according to a report by the Indian government. Its total virtual assets market is equivalent to approximately 400 billion rupees or $5.37 billion.

India has the highest adoption rate in the world after Vietnam, boasting more than 100 million investors in the space, according to an estimate from Asian fintech firm TripleA. It is ranked the top of the Chainalysis 2021 Global Crypto Adoption Index.

There is evidence that high taxes are throttling the industry. According to Scott Melker, a 30% tax on all criptocurrencies trading hinders the growth, as of today, cryptocurrencies andBlockchain are legal and encouraged in the country. Some exchanges reported a 70% decline in trading activity after the disastrous tax policy. It seems like India only has an interest in what it can do for the country, not whatBitcoin can do for its citizens. The country is about to launch a central bank digital currency, CBDC, joining 100 odd countries, including the United States, that are looking seriously at the viability of a CBDC.

India's central bank has criticised virtual assets due to their price volatility and their links to money-laundering and terror financing. New Delhi is working on regulations related to cryptocurrencies that would need to be reviewed by India's legislature before it can be passed into law.