One of India's most prominent cryptocurrency exchanges, CoinDCX, is cutting about 12% of its staff as the prolonged bear market and India's tax policies hit revenue.
One of India's most prominent crypto exchanges is feeling the brunt of crypto winter. Uh A you've been watching the developments closely. India has had kind of a turbulent experience uh with crypto first that 30% tax and that 1% tax that I believe you can correct me if I'm wrong, that exchanges are responsible for on every transaction. Um Talk to us about what's going on in India as it relates to crypto, paint a picture. What's it like? There are people adopting crypto? Are they afraid of it? Have these new rules deterred? Uh Folks I think it's important to just start by saying that of the population in the world. India is the largest. Uh does that mean it's got the most number of traders? Well, not necessarily the money comes from the US, we know that, but India is incredibly important and I'd say for two reasons, one is the sheer population strength and, and two, it's the G 20 presidency that it holds right now. So it's kind of steering anything to do with global rules around crypto. I'll come to that in a bit. But what's happened right now is that a cascading effect, domino effect that's taken place in uh in India since February 1 2022. When during the budget, the Finance Minister of India announced uh taxes very stiff taxes, two in particular 30% taxes on profit and 1% tax deducted at source on every single transaction. Now that really, you know, it, it took, it took the wind out of whatever uh you know, momentum the crypto industry had, had, had got at that time. Uh And as a result of that, there was a crypto brain and anyone who wanted to start up, a company was moving to Singapore or to buy. And then, you know, there was a shadow band before that. So it was an industry that uh was, was finally getting going and then suddenly it was, you know, the, the legs under it were taken away, uh local payment processes were cut off. Uh We did a story a few weeks back. Actually, we looked at some of the best or most prominent exchanges in India. We looked at whether they had cash uh to do business, what their runway looked like. And we found that most of them had 1 to 4 years and CO DC X which has kind of like taken the lead along with uh maybe uh coin switch, uh which is another exchange uh after and Binance got into a feud. Uh So what coin EC was doing was trying to reach out to regulators of Finance Ministry and anyone who's willing to listen and bring them onto the table to have that conversation, which was kind of impossible in India because of the taboo that crypto had had got because the central bank, RB I Reserve Bank of India had set up and just banned the thing. And they continue to say that at, at G 20 meetings, we reported about that. Now the second aspect is the G 20 thing, which is that under the presidency, India is effectively going to be holding the leaders as meet Joe Biden will be there. Anyone who's anyone amongst the top economies in the world, they'll be there. Um And effectively India will go out there and say, well, we got everyone together, we decided that we want to make crypto global regulation consensus building a priority and we're gonna, we're gonna put it out there with the help of the FSB the Financial Stability Board and the IMF a synthesis paper will come out. Now, what that will say, we kind of already know it's been reported by my colleague, Jack Sickler and myself. Uh but India is not going to come up with its own regulation and the uncertainty is going to continue. They have kind of made up their mind sources, they tell us that. And as a result of that there is uncertainty for these exchanges continues and they just have to kind of like just manage and, and that's what they're doing, we did go to DC X office in Bengaluru, which is the, it capital of India. Uh just a few weeks back and we did meet their people and we did not at that time have a sense that this would happen. All right. A um for our audience who wants to read up more about your reporting, you can do that on coindesk dot com.