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The CEO of Indian crypto exchange WazirX and founder of Shardeum has stated that the one percent withholding at source (TDS) tax is dangerous for high-frequency traders.
Nischal Shetty said that while international regulators are trying to strengthen oversightBehind cryptocurrencies, Indian lawmakers are successfully "killing the cryptocurrency sector" in the country.According to the head of WazirX, the tax on cryptocurrency transactions in excess of 10,000 rupees (about $120), introduced on July 1, 2022, mayhave no critical consequences for the average retail trader who is able to buy crypto assets and store fromHowever, a 1% TDS has become a nightmare for high-frequency traders.
"If you trade often, you can'tallowing yourself to lose 1% every time you make a trade causes a lot of problems. TDS can make the bearish trend in the crypto market even more dangerous. If profits are small, then the tax puts traders at a disadvantage. Therefore, high-frequency trading is very rare in India now,” Shetty said.
Regarding the development of regulatory rulescryptocurrencies, then Indian legislators primarily seek to control exchanges as much as possible. However, the introduction of TDS in the amount of 1% proves that a universal approach cannot be applied to the regulation of cryptocurrencies, the businessman argues.
In his opinion, India is two to three years behindfrom the USA on the introduction of cryptocurrencies among retail investors. The country has been working on regulating the crypto industry since 2018, but recently local legislators have been more active in addressing the issue. Shetty sees value in international regulation of crypto assets, when agencies from different countries join forces. Such a joint approach to cryptocurrency oversight could speed up the development of new regulations in India, Shetty believes.
The CEO of WazirX suggests that inThe Indian government will not abolish this one percent tax in the coming years, although it hopes that the authorities will cease to be hostile to cryptocurrencies.