Spot trading on crypto exchanges falls by at least 70 pc after new TDS rules
Crypto exchange WazirX was worst hit, with spot trading volumes down 82 percent between June 30 and July 3, after the new TDS rules came into play.
The new tax deducted at source (TDS) rules that ask for 1 percent of all crypto trades made in India has had an immediate effect on the business of crypto exchanges. The new TDS rules were first introduced during the budget session in February, and came into effect on July 1.
First reported by The Economic Times, trading volumes across three of India's biggest exchanges have fallen by at least 70 percent, according to data from crypto research and consulting firm Crebaco. The data compared trading volumes on Thursday, June 30, and Sunday, July 3.
saw the greatest drop in volumes, with an 82 percent decline. had a 76 percent decline, while had a 70 percent decline.
While exchanges do traditionally see some trading volume dips over the weekends, it is expected that the new rules will continue to place a downward pressure on trades during the week as well.
Speaking to The Economic Times, WazirX vice president Rajagopal Menon said, "At present, it is still premature to predict the ramifications of TDS. We will be in a better position to understand this by the second week of July. There has been a fall in trading across the industry as investors shift to hold and there may be another dip as traders see their capital getting locked while trading on KYC-compliant Indian exchanges."
Edited by Megha Reddy