Exchanges in India are suffering because of the strict government regulations and the declining prices in the crypto market. Crypto exchanges are suffering because of reduced adoptions and regulatory issues.
On the other hand, the Reserve Bank of India, which opposes crypto, is still preparing to use blockchain technology in banks.
Reports say that while most prominent crypto exchanges are reducing their staff, the business community is trying to be strategic as they wait for the government to impose new taxes and the crypto winter.
The Volume Reduces By 95% In A Major Crypto Exchange
Bloomberg announced that Wazirx’s trading volume dropped by 95% starting from October 2021 after the government imposed new tax laws. Wazirx is one of the crypto exchanges in the country that is growing fast. The company’s Vice President, Rajagopalan Menon, explained to Bloomberg that 2021 was a very successful year for the exchange because it employed 50 programmers within seven months. It had six initially.
Nevertheless, he said they do not plan to lay off many employees to cope with the current situation. Instead, they are cutting down on unnecessary expenses and only hiring to fill the most crucial positions in the company. This is their strategy for surviving crypto winter.
The crypto winter is affecting everyone in the crypto industry worldwide and not just India. All over the world, businesses and crypto exchanges have had to lay off some of their staff to survive crypto winter. Major exchanges reducing their staff include Blockfi, Bybit, Robinhood, Coinbase, Bitso, Gemini, and Crypto.com. In India, Vauld, one of the local crypto exchanges, dismissed 30% of its employees, according to Cryptopotato. Experts estimate that crypto-based businesses have laid off more than 1700 employees this month.
India To Introduce A New Crypto Tax In July
Currently, the government taxes 30% on the profits the crypto businesses earn on crypto transactions. Furthermore, on July 1, a new tax will come into force, taking 1% on every transfer done using cryptocurrencies.
For this reason, crypto investors and users have stopped seeing the country as conducive to the cryptocurrency industry. However, this was not the case several months ago because Chainalysis reported that the sector experienced tremendous growth of 600% in that period. But currently, the growth has dropped significantly.
Ironically, the RBI is collaborating with international companies and other government-operated banks to work on a pilot project that will apply Blockchain to combat the frauds that plague the banking system in the country.
This indicates that even though the government keeps restraining crypto companies, it acknowledges that blockchain technology, which is the backbone of the crypto industry, is a great tool that can help them control the financial system and protect it from fraudsters.