After a 1% tax levied on crypto transactions took effect in July in India, crypto exchange Binance has now seen a significant increase in the number of user sign-ups in the country.
According to Bloomberg, the number of Binance app downloads in India jumped to 429,000 in August and this number is the highest this year. In contrast, daily trading volumes at several major India-based cryptocurrency exchanges are reportedly down over 90% since the 1% TDS took effect.
Commenting on the new tax, Rohan Misra, CEO at SEBA India, a subsidiary of Swiss-based SEBA Bank, opined:
“The recent tax regulation is not explicitly clear on whether the 1% tax deducted at source extends to crypto derivatives transactions involving futures, as it does to crypto spot transactions.”
He further stated that the 1% TDS is levied on top of a new 30% tax on gains from crypto assets.
While Binance’s app downloads soared, some major Indian cryptocurrency exchanges are seeing declines in the number of user sign-ups. Indian crypto exchange Coindcx’s app downloads dwindled to 163,000 in August from 2.2 million in January, according to data from market intelligence firm Sensor Tower.
Indian crypto exchanges are also facing limited support from the banking system, making it difficult for users to move money in and out of trading platforms.
Another Indian crypto exchange, Wazirx, saw its monthly app downloads fall to 92,000 in August from about 596,000 in January.
Regarding whether Binance has started collecting the transaction tax from users in India, a spokesperson for the exchange told the news outlet that the company is currently monitoring the situation and will make further announcements in due course.