Early this month, the Binance CEO said at Singapore Fintech Festival that high taxes can kill the crypto industry in India.
Binance CEO Changpeng Zhao (CZ) has all but given up on India. Pointing out the 1% transaction tax that came into force on 1 July 2022, CZ said it makes crypto trading unviable in India.
Speaking at the TechCrunch Session: Crypto 2022 on November 17 in Miami, CZ further pointed out that Binance is engaged with blockchain associations and influential persons in India to present the industry’s stance before the policymakers, a TechCrunch report said.
CZ red flags 1% transaction tax
“If you are going to tax 1% on each transaction, there is not going to be that many transactions… To be honest, I don’t think India is a very crypto-friendly environment,” he said.
While CZ maintained his negative outlook on India, first publicly expressed during the Singapore Fintech Festival early this month, Binance is available to Indian users.
“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,” he explained.
Indian exchanges have witnessed up to a 90% fall in trading volume after the transaction tax on crypto activities became effective in July.
Binance sees spurt in Indian traders
The 1% transaction tax on crypto activities became effective on 1 July 2022. And, Binance seems to be a major gainer as traders have deserted Indian exchanges for fear of tax reporting and compliance and thronged to foreign exchanges, including Binance, which is yet to take a call on compliance with new taxes.
The Binance app witnessed 429,000 downloads in August in India, the highest for the year, and over three times more than the runner-up, CoinDCX, media reports said in early September.
“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,” he told the panel at the opening session of TechCrunch’s first dedicated event on crypto.
CZ has not given up entirely
But the Binance CEO has not completely removed India from his scheme of things.
“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… We are trying to get this message across, but tax policies typically take a long time to change,” Zhao cautioned.