Binance-owned WazirX, India’s largest crypto bourse, has seen daily sign-ups on its platform jump almost 30% since Feb. 1, when the government unveiled the levy on the transfer of digital assets in its annual budget, said co-founder Nischal Shetty. At rival CoinSwitch, the daily increase was 35%, according to founder Ashish Singhal.
While it might seem counterintuitive that a steep tax would cause people to flock to digital tokens, the step was seen as legitimizing an industry that’s been in regulatory limbo amid fierce resistance from India’s central bank. Shetty said he expects some 100 million people in the country to start investing in crypto in the next two to three years.
“Investors are seeing a lot of clarity and visibility now with taxation announced in the budget,” Shetty said in an interview. “Earlier, people were on the sidelines wondering if cryptos were allowed or not.”
CoinSwitch’s registered users surged to 15 million as of January from 1 million a year ago, and part of the recent spike in sign-ups was due to its consumer education campaign, according to the exchange. Neither bourses disclosed how many customers they added in total since Feb. 1.
The average new client puts about 30,000 rupees to 40,000 rupees ($400 to $533) in their trading account, said Shetty. WazirX is also seeing more interest from companies that until now were wary of the “optics” of investing in crypto, he said.
India has yet to introduce legislation governing digital assets, leaving its mushrooming crypto industry mired in uncertainty. At the same time, the Reserve Bank of India has been a vocal critic, with Governor Shaktikanta Das earlier this month calling cryptocurrencies a threat to stability and comparing them unfavorably to the 17th century Dutch tulip mania.