India's 30% cryptocurrency tax spurs boom in local digital currency exchanges

India’s decision to levy a 30 percent tax on profits from cryptocurrency trading is a boon for the country’s digital asset exchanges, industry sources said on February 17.

Nischal Shetty, founder of India’s largest cryptocurrency exchange WazirX, said daily registrations to his platform have increased by nearly 30 percent since the government announced the digital asset transfer tax in its annual budget on Feb. 1, while rival CoinSwitch founder Ashish Singhal said The platform has seen a 35 percent increase in daily sign-ups, he said.

It may seem counterintuitive that high tax rates have led people to flock to digital tokens, but the move is seen as a sign of legitimizing an industry that has been in regulatory instability amid a backlash from the Reserve Bank of India. Shetty said he expects about 100 million people in the country to start investing in cryptocurrencies in the next two to three years.