Crypto markets in India have been suffering because of the government's overly restrictive control over cryptocurrency exchanges. This is caused not only by a decline in adoption but also by regulatory uncertainty, which results from an unclear position on where digital currencies should be categorized within current law.
Meanwhile, the "anti-crypto" Reserve Bank of India is working on a pilot project that would introduce blockchain into their banking system.
A June 25 report stated that big names in the crypto industry are laying off their staff as they prepare for a significant market correction and new tax rates. It also added that most Indian businesses are trying to walk on the side of caution when dealing with crypto.
According to Bloomberg, the recent legislation has significantly impacted the cryptocurrency market, with one of India's fastest-growing exchanges experiencing 95% less trading volume since October last year.
The vice president of WazirX, Rajagopalan Menon, told Bloomberg that last year was the golden age for his company because they went from having six programmers to hiring fifty in just seven months.
However, Menon assured that although they do not plan on any significant layoff spree, the company is cutting all non-critical costs to survive this crypto winter, so employees are only being hired for critical positions.
"We are hiring only critical hires; we aren't spending money at all. It's literally crypto winter here,"
Cryptocurrency exchanges have been forced to reduce their staff in order to cope with the crypto winter. This is a problem not only for Indian businesses but across all industries that rely on cryptocurrency trading as well. Crypto.com, Coinbase, and Gemini are just three of the many platforms that have been going through significant staffing changes in recent weeks. The local crypto exchange Vauld also laid off 30% of its total workforce.
Crypto businesses have been firing people at an alarming rate this year, with Business Insider recording over 1700 firings in June alone.
The government of India has imposed a new tax that will deduct 1% on all transactions made through cryptocurrencies. This is in addition to the current taxation rate, which currently stands at 30%.
The country is no longer considered as good for the crypto industry due to recent changes. In fact, it's actually getting worse now with prices dropping dramatically and more companies withdrawing their operations from this region entirely.
The Reserve Bank of India is working in conjunction with other state-owned banks and international companies such as IBM to implement blockchain technology for combating fraudulent activities that stalk the country's banking system.
This means that the government is aware that cryptocurrency can be a valuable tool in exercising greater control over financial transactions. Still, it's not willing to give up its power just yet.