The CEO of cryptocurrency exchange Binance, Changpeng Zhao (CZ), does not currently see India as a viable country to expand his crypto exchange operations. He detailed at a Techcrunch Crypto conference Thursday:
To be honest, I don’t think India is a very crypto-friendly environment.
Zhao is particularly discouraged by the crypto tax regime that the government of India implemented earlier this year. In addition to taxing crypto income at 30%, crypto transactions are subject to a 1% tax deduction at the source (TDS).
Citing India’s aggressive tax environment, the Binance CEO said: “If you are going to tax 1% on each transaction, there is not going to be that many transactions.”
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.
Several other global cryptocurrency exchanges have attempted to launch in India, including the Nasdaq-listed cryptocurrency exchange Coinbase. The exchange tried to launch in India in April but soon halted services. Coinbase CEO Brian Armstrong said in May that the firm disabled its support for the local payments system UPI “because of some informal pressure from the Reserve Bank of India.”
While cryptocurrency income and transactions are taxed, India still does not have a regulatory framework for cryptocurrency. The Indian finance minister, Nirmala Sitharaman, previously said that crypto regulation will be one of the topics of focus during India’s G20 presidency. The government hopes to establish a tech-driven regulatory framework for crypto after discussing it with other G20 countries.