For Mridul Gupta, the COO of India’s first crypto unicorn CoinDCX, “business as usual” has taken on new meaning.
He joined the crypto exchange last year “to drive the growth of the CoinDCX business and strengthen India’s leadership in a decentralized future.”
Fast forward to the summer of 2022, he and other members of the startup’s management team are busy trying to convince Indian regulators and banks to work with crypto exchanges.
“Business as usual for me is different from what it means to you,” Gupta said. DHwhile sipping his coffee on a rainy evening in Bangalore last week.
Like many crypto exchanges in India, CoinDCX – which Gupta says has 15 million users – saw a huge drop in trading volume after the government began taxing crypto assets from April 1. Additionally, regulatory uncertainty has made banks reluctant to allow crypto transactions through their networks.
To make matters worse, the National Payments Corporation of India, which enables digital payments and settlement systems, recently expressed its reservations about the flow of funds through the Unified Payments Interface (UPI) for crypto transactions, putting a brake on many crypto’s expansion plans. exchanges in India.
Gupta and his colleagues have seen trading volumes at CoinDCX drop by around 40% since the UPI ban, forcing them to act quickly and work harder to win over the powers that be. “The topics of discussion have definitely intensified. The number of sessions with banks and regulators does not matter. We are more concerned about the outcome,” Gupta said. He celebrates the small victories.
“To our advantage, questions from banks have shifted from basic questions like what is crypto to how transactions take place,” Gupta said. DH.
The worst may not be over for the crypto industry.
“We have to solve this (UPI) problem and we will. Not sure when it will be fixed but the biggest issue is 1% TDS on crypto from July 1st. This will shake an investor’s pocket, which, in turn, will shift them to offline channels. This will drive our volumes down,” Gupta said.
While the government began taxing all gains from trading cryptocurrencies and similar digital assets at a flat rate of 30% from April 1, another 1% withholding tax (TDS) will be calculated when such a transaction takes place from July 1st. .
TDS will affect large investors more and be less of a concern for small investors, said Kumarmanglam Vijay, an attorney at J. Sagar Associates.
“Obviously, the TDS requirement was introduced in order for the government to get information about crypto transactions. 1% of the consideration is a small amount compared to the 30% tax rate on gains from transferring crypto. Persons who do not exercise any commercial or professional activity are exempt from withholding tax when the amount paid is less than Rs 50,000 during the financial year. Therefore, it is intended to report larger transactions to the government,” Vijay explained.
Despite the long list of issues plaguing the crypto industry in India, it still has more cryptocurrency holders than any other country in the world. It is also among the top five countries when it comes to the percentage of the population that owns cryptocurrency. And it is because of crypto owners like Samrat Mazumdar.
He switched to Binance to avoid regulatory hassles facing Indian exchanges and new taxes related to crypto transactions in Asia’s third-largest economy.
“Now with the tax regime, I don’t think I’ll go back to using an Indian scholarship. I’m so glad I made the decision to switch to using a diaper. I will not return until the tax slabs are streamlined in India,” Mazumdar said, confirming Gupta’s worst fears.
So will CoinDCX abandon India and go elsewhere?
“Payment gateways are down is the short-term threat. I can’t give a timeline as to when it will be resolved, but the long-term opportunity is that regulations are being worked on. But you know, we will come back stronger once the payment gateway is settled, mainly because the markets are volatile and people would want to invest in crypto. For us, it is not a question of whether this does not happen. We have to somehow make it happen,” Gupta said. DH.
CoinDCX plans to educate potential investors, work with regulators, and introduce new products even amid greater uncertainties, he said.
“We already have a systematic investment plan product. We are working on different timelines for our SIP product. We want a lot of investors and not just traders,” Gupta said. CoinDCX is currently the most popular crypto exchange.
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CoinDCX Not Ready To Give Up India
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