Central bank asserts that government must address its concerns regarding cryptocurrency.
Indian authorities, in alignment with the Reserve Bank of India (RBI), have confirmed that the regulator’s position on cryptocurrencies remains unchanged, emphasizing an outright ban. Speaking on the condition of anonymity, officials told the Hindustan Times that treating crypto assets as regulated entities may not offer significant advantages and that they should be treated more like gambling instruments. While the Indian government is engaging with crypto businesses on the matter, the RBI acknowledges that concerns surrounding digital currencies cannot be ignored. In the midst of this uncertainty, entrepreneurs in the sector are facing challenges imposed by local regulators, such as the implementation of a 30% tax on crypto profits and a 1% tax deduction at the source (TDS) on all transactions, leading to a significant decline in traffic on crypto exchanges.
Nischal Shetty, CEO of Indian cryptocurrency exchange WazirX, recently indicated that tax relief on crypto transactions in India is still years away, with authorities likely to maintain the 1% TDS until 2025. Shetty highlighted that there have been no formal discussions between the industry and lawmakers on the matter. Meanwhile, Sumit Gupta, the head of another Indian crypto exchange, CoinDCX, stated that his firm is in talks with the government to reduce the TDS from 1% to 0.01%, although he did not disclose the timeline for the update.
In response to the challenging market conditions, WazirX downsized its workforce by 40% in October 2022, with 60 employees out of 150 affected. CoinDCX also downsized its staff by 12% in August 2023, citing the prolonged bear market and changing tax policies that impacted its revenue.
