Last year the government introduced 1% TDS, which will be deducted when purchasing any virtual digital asset.
โThe implementation of a 30% tax and a 1% TDS has led some users to explore platforms outside of India in an effort to potentially avoid these taxes,โ says Sumit Gupta, co-founder and CEO of the cryptocurrency exchange.
The imposition of taxes has significantly impacted volumes, but with the growing interest in cryptocurrencies, CoinDCX hopes to expand its user base. Edited excerpts from an interview with ETMarkets:
Can you take us through CoinDCX's journey since its inception in 2018?
Over the last 5 years, we have worked tirelessly to bring cryptocurrency into the mainstream and create a strong foundation for our platform. We have witnessed exponential growth and our user base has exceeded 15 million. It has been an incredible journey!
It's about empowering users and giving them the tools they need to thrive in the crypto/Web3 space.
One area where we see huge potential is in decentralized finance, or DeFi. That's why we're so proud to introduce Okto. This self-custody wallet gives users secure access to a wide range of tokens across multiple chains.
We have also made strategic investments in various Web3 companies both in India and globally through CoinDCX Ventures.
So, it's an exciting time to be a part of CoinDCX, and we're just getting started!
Can you share your total and active customer base as of March and where you want to see it by 2024?
Over the years, CoinDCX has seen remarkable growth in its customer base, just like many other exchanges in India. However, it is crucial to recognize the impact of various factors on user behavior. One such factor is the implementation of a 30% tax and 1% TDS, which has led some users to explore platforms outside of India in an effort to potentially avoid these taxes. Indian exchanges have taken a significant hit due to the introduction of 1% TDS.
While I appreciate and support the goal of monitoring Virtual Digital Asset (VDA) transactions, I believe this goal can be achieved just as effectively with a lower TDS rate of 0.01%.
With the growing interest in cryptocurrencies, we anticipate a strong expansion of our user base. In 2024, we will continue to focus on three key pillars: innovation, education, and building the Web3 ecosystem.
The biggest in the world Cryptocurrency exchange is facing fraudulent practice charges in the US How do companies like yours build trust among investors given that crypto companies are still unregulated in many countries, including India?
CoinDCX places a strong emphasis on transparency, security, and protection. We conduct regular proof-of-reserve audits, hire accredited third-party auditors, and publish quarterly reports to ensure the validity of our assets and balance client holdings.
We have also developed the CoinDCX 7M model to evaluate the tokens listed on our exchange. We are registered as a reporting entity with FIU India.
What are the main concerns around cryptocurrencies in India and what needs to be done to build traction in this asset class?
Regulatory uncertainty is one of the main concerns around cryptocurrencies in India. Clear guidelines and regulations are crucial to creating a conducive environment for both investors and exchanges.
Establishing a regulatory framework that protects investors while fostering innovation will help build confidence in the asset class.
The Web3 space is characterized by rapidly evolving technology and a constantly changing landscape. As with any emerging technology, the lack of knowledge and misconceptions surrounding cryptocurrencies and Web3 among the general population need to be addressed. Education plays a fundamental role in overcoming these barriers.
Can cryptocurrencies play a role in promoting financial inclusion?
Absolutely. Virtual digital assets have the potential to be a catalyst for promoting financial inclusion, especially among marginalized populations.
While it may take time to fully tap into this potential, we have already seen the positive impact of digital transactions and platforms like UPI in India.
Additionally, DeFi platforms offer opportunities for loans, savings, and investments. However, it is imperative to address digital literacy, accessibility, and regulatory considerations to fully maximize impact in promoting financial inclusion.
Over the past year, the crypto market has experienced high volatility. How do you expect 2023 and 2024 to play out as macro risks persist in developed economies?
The crypto market has become increasingly intertwined with global macroeconomic events and sentiment. As long as macro risks persist in developed economies, they will continue to influence the crypto market.
The market has experienced both growth and correction periods in the past, and this pattern may continue in the future.
Looking ahead, the widespread adoption and recognition of crypto assets and blockchain technology will play a crucial role in shaping the market. Broader acceptance can help mitigate some of the volatility associated with macro risks.
While macro risks will persist, the long-term trajectory of the crypto market remains positive.
Many Crypto companies are considering diversification to broaden investor participation and provide alternative investment options such as MFs. Is CoinDCX also planning something along these lines?
Our unwavering commitment to the Web3 industry stems from our firm belief in its immense potential and the transformative power of Web3 and cryptographic technologies.
With the release of Okto, our DeF3 wallet, we have taken a logical step forward, marking an important milestone in our journey. But it does not stop there.
We constantly push boundaries and invest in technology, talent development, and community building. Our goal is to create a thriving ecosystem that supports the growth of Web3 and positions India as a global leader in the Web3 space. So you can count on us to be at the forefront of this exciting industry!
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are my own. These do not represent the views of Economic Times)
