The trading activity on India’s leading crypto exchange, WazirX, drastically declined in 2023, reaching $1 billion due to mounting regulatory pressures and the global downturn in digital asset prices and equities.
Compared to the highs of 2022 and 2021, WazirX experienced a significant drop in crypto trading volumes. The platform’s trade volume was 90% lower than 2022’s $10 billion and 97% lower than 2021’s $43 billion.
Despite WazirX highlighting the $1 billion trading figure in a recent statement, the exchange avoided acknowledging the much higher trading levels during the peak crypto frenzy in 2021 or even the pre-sell-off levels of 2022.
This massive 97% decline in trade volume aligns with increasing regulatory pressures faced by WazirX in India, contributing to the struggles of the country’s once-thriving crypto sector. Indian authorities imposed a 30% tax on crypto gains and a 1% deduction on transactions last year. Political leaders have commended Prime Minister Narendra Modi for safeguarding Indian citizens from crypto-related frauds and market volatility.
The taxation policies have pushed many Indian traders to use foreign platforms like Binance and Coinbase, with the latter discontinuing new customer onboarding in India. This intensified regulatory crackdown has created uncertainty among local investors and significantly dampened interest in supporting India’s crypto startups.
The unfavorable regulatory environment has made venture capital firms cautious about investing in the troubled sector, leading many prominent India-focused VCs, previously enthusiastic about crypto companies, to shift their focus to other industries.
