As the crypto cold spreads, Indian exchanges attempt to mitigate its impact. However, the RBI wants to give blockchain a new function.
In India, the crypto market collapse and the government’s too tight management of the sector have led many exchanges to suffer, not just because of a drop in popularity but also because of legal uncertainty.
The “anti-crypto” Reserve Bank of India (RBI) keeps working on its pilot project to use blockchain technology in the financial sector.
The volume of WazirX has decreased by 95% during the last year
The majority of Indian firms are attempting to tread carefully as they prepare for the crypto winter and increased tax rates, according to a June 25 Bloomberg story. This comes as major crypto sector players are laying off personnel.
Since October of last year, Bloomberg reports that trading activity on WazirX, one of India’s fastest-growing cryptocurrency exchanges, has decreased 95 percent due to new tax laws.
The vice president of WazirX, Rajagopalan Menon, told Bloomberg that last year was the company’s golden period since they expanded from employing six programmers to fifty in only seven months.
To survive the crypto winter, the business is slashing all non-essential expenditures and only employing crucial roles, he promised.
“We are simply making essential employees and are not spending any money. Literally, it’s crypto winter here,”
The crypto winter affects more than just Indian exchanges. Due to the crypto winter, cryptocurrency exchanges and other firms in the field have been compelled to cut their workforces globally. A number of platforms, including Crypto.com, Coinbase, Gemini, Robinhood, Bitso, Bybit, and Blockfi, have seen personnel reductions. And for those interested in learning more about the situation in India, the local cryptocurrency exchange Vauld let off 30% of its workers.
Business Insider reports that crypto companies laid off around 1,700 employees in June alone.
India Introduces New Cryptocurrency-Related Taxes
It should be mentioned that India is now taxing crypto transactions at a rate of 30 percent on the income gained, in addition to a new tax that will take effect on July 1 and subtract 1 percent from all cryptocurrency transfers.
Read More here, Indian crypto traders may face a 28% tax on crypto transaction
According to Chainalysis, the nation is no longer as favorable for the crypto business as it was a few months ago when the sector increased by 600 percent. In reality, the current tendency is just the reverse.
However, the Reserve Bank of India, the country’s central bank, is collaborating with other state-owned banks and multinational corporations like IBM on a pilot project to apply blockchain technology to combat fraudulent activities that plague the country’s financial system.
This indicates that, while continuing to exert pressure on cryptocurrency startups, the government recognizes that the technology behind cryptocurrencies may be a beneficial instrument for exercising better control over the financial system and preventing criminal actions and practices.
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