Changpeng Zhao (CZ), the CEO of cryptocurrency exchange Binance, does not currently consider India to be a viable location in which to develop his crypto exchange operations. At a Techcrunch Crypto conference on Thursday, he explained:
“To be honest, I don’t think India is a very crypto-friendly environment.”
The crypto tax scheme that the Indian government enacted earlier this year has especially demoralized Zhao. Cryptocurrency transactions are subject to a 1% tax deduction at the source in addition to crypto income being taxed at 30%. (TDS).
According to the CEO of Binance, if taxes are levied at 1% on each transaction, there won’t be that many transactions given India’s severe taxation regime. He emphasized:
“A user could trade 50 times a day and they will lose like 70% of their money. There is not going to be any volume for an order book type of exchange. So we don’t see a viable business in India today.”
“We just have to wait. We are in conversation with a number of industry associations and influential people and trying to put some logic there,”
CZ continued:
“We are trying to get this message across, but tax policies typically take a long time to change,”
Zhao cautioned, adding:
“Binance goes to countries where regulations are pro-crypto and pro-business. We don’t go to countries where we won’t have a sustainable business — or any business, regardless of whether or not we go.”
Other international cryptocurrency exchanges, such as Coinbase, which is listed on Nasdaq, have attempted to open in India. In April, the exchange attempted to open in India, but operations were quickly suspended. In May, Brian Armstrong, CEO of Coinbase, said that the Reserve Bank of India had put “informal pressure” on the company to stop supporting the UPI local payments system.
Although bitcoin transactions and income are taxed, India currently lacks a regulatory framework. Cryptocurrency regulation would be one of the issues of focus during India’s G20 presidency, according to Nirmala Sitharaman, the Indian finance minister. After discussing it with other G20 nations, the administration intends to create a tech-driven regulatory framework for cryptocurrencies.
