A number of crypto-focused venture capital firms have raced to India over the past two years, hoping to transform the world’s second largest internet market’s large developer community into a major web3 powerhouse. . But what does Changpeng “CZ” Zhao, arguably the most powerful and influential figure in the cryptocurrency industry, think about India’s potential?As of today, there aren’t many.
“To be honest, I don’t think India is a crypto-friendly environment,” Zhao said at the TechCrunch Crypto conference on Thursday. Mr. Zhao is not the only one with such a grim view of the Indian market. Dozens of investors and startup founders I’ve spoken to personally share similar concerns, but Zhao’s comments are noteworthy.
Zhao accused the country’s high tax environment of making the market less viable for global players. I was. Indeed, Binance, the world’s largest cryptocurrency exchange, operates for Indian users.
“If a user trades 50 times a day, they will lose 70% of their money. There is no volume for order book type exchanges. So we don’t see a viable business in India today. We’re talking to a lot of industry groups and influencers and trying to put some logic in there,” he said, adding that imposing a high tax on each transaction would be widely He added that it would lead to a reduction in tax accumulation.
“We are trying to get this message across, but tax changes usually take a long time,” warned Zhao. “Binance goes to countries where regulations favor cryptocurrencies and businesses. We will not go to countries where we cannot do sustainable business.
Mr. Zhao dismissed concerns the company sees as unlikely in India. Deliberation of questionable transactions with local exchange WazirX.
India enacted the law earlier this year Taxation of Virtual CurrenciesIncome from the transfer of virtual assets is taxed at 30%. To keep track of all such crypto transactions, New Delhi has her 1% tax credit at source for payments made in connection with the purchase of crypto assets.
Alongside the market downturn, the country’s move has seen local exchanges Coinswitch Coover, backed by Sequoia India and Andreessen Horowitz, and Pantera-backed Coin DCX brutally trade on their platforms. wiped out.
WazirX was processing around $500 million in trading volume per day at the peak of last year’s cryptocurrency bull market. That number was below $5 million a month ago, according to a person with direct knowledge of the matter.
Other global exchanges are trying to push in India. Coinbase, which backs both CoinDCX and CoinSwitch Kuber, launched its crypto platform in the country earlier this year. immediately rolled back the service In fear of regulation.
Coinbase co-founder and CEO Brian Armstrong said the company disabled support for Coinbase’s local payment infrastructure UPI in May. informal pressure from [central bank] Reserve Bank of India”