The trading volume at top Indian crypto exchange WazirX fell to $1 billion in 2023 as the platform faced intensifying regulatory pressure in its home market alongside a broader slump for digital asset prices — and equities — globally.
The once-booming WazirX saw a significant decline in trading volume this year, with only $1 billion traded on the platform. This is a stark contrast to 2022 when $10 billion was traded, and an even further drop from 2021’s $43 billion.
Despite the drastic decrease, WazirX attempted to put a positive spin on the situation in a statement released on Tuesday. However, the exchange failed to acknowledge the significantly higher trading volume during the peak of the crypto craze in 2021 and 2022 before the market started to take a sharp downward turn.
The 97% decrease in trading volume is a direct result of the growing pressure from Indian regulatory bodies on WazirX. These authorities have imposed various taxes on virtual currencies, including a 30% tax on gains and a 1% deduction on each crypto transaction. The government claims that these measures are to protect citizens from falling victim to the prevalent frauds in the crypto market and the dramatic decline in asset prices.
According to a recent report by New Delhi-based think tank Esya, these taxation rules have forced many Indian traders to turn to foreign platforms like Binance and Coinbase. However, even these giants have faced struggles in the Indian market, with Coinbase suspending new customer onboarding in the country.
The regulatory crackdown on cryptocurrencies in India has created a sense of fear and hesitation among local investors, who were once enthusiastic about supporting the growth of the country’s crypto startups. This has also caused venture capital firms, who were previously eager to invest in the crypto sector, to have a dramatic change of heart and opt for other industries instead.
In summary, the regulatory pressure faced by WazirX and other Indian crypto platforms has caused a massive decline in trading volume and has led to a shift in focus for both investors and venture capitalists in the country.
