Indian Crypto Companies Are Moving to Dubai and Singapore
- WazirX, a leading Indian exchange, has relocated its co-founders to Dubai.
- The CEO of CoinSwitch stated that India has long struggled with brain drain.
- Local exchanges are being pushed to Dubai and Singapore by India’s onerous cryptocurrency taxation rules.
The new taxes come as a blow to an already struggling industry in India. Local exchanges have been fighting an uphill battle against the Reserve Bank of India’s (RBI) ban on banks dealing with crypto businesses. The ban has forced exchanges to operate in a cash-only environment and significantly hamper their growth.
The situation has become so dire that some exchanges are now considering moving their operations overseas to countries with more favorable regulations. Singapore and Dubai have emerged as popular destinations due to their supportive environments for cryptocurrency and blockchain technology.
While it remains to be seen how many exchanges will actually make the move, the very fact that they are considering it is a sign of the growing frustration with the current regulatory climate in India. Unless the government takes steps to improve the situation, we may see more and more businesses leaving for greener pastures.
The new tax law in India has had a major impact on the country’s cryptocurrency trade volume. In the first month after the law went into effect, trade volume at four regional exchanges crashed by as much as 72%. This is a significant blow to the crypto industry in India, which was already struggling to recover from the 2018 bear market.
The new tax law is just one of many challenges that the Indian crypto industry is facing. The Reserve Bank of India (RBI) has been cracking down on banks and financial institutions that deal with cryptocurrencies, and there are rumors that the government is planning to ban cryptocurrencies altogether. These challenges have made it difficult for exchanges like WazirX, ZebPay, CoinDCK, and BitBns to stay afloat.
It remains to be seen how the Indian crypto industry will recover from this latest setback. For now, traders and investors will have to contend with lower trade volumes and higher taxes on their profits.
The Virtual Assets Regulatory Authority, the emirate’s cryptocurrency regulator, started issuing licenses for crypto exchanges in March, and two months later Dubai unveiled its first legislation governing digital assets.