Crypto startups bet on rewards, cashback, and ETFs
New Delhi Cryptocurrency and investment startups are betting on cashback, bonuses, fixed-interest investment plans and exchange-traded funds (ETFs) to prevent trading volumes from dropping dramatically as the government enforces the new tax deduction law at source (TDS). 1% TDS on crypto transactions as of July 1.
For example, Indian cryptocurrency exchange CoinDCX offers “earn,” a passive income scheme that claims to offer up to 13% interest on user crypto holdings. This scheme is similar to the concept of cryptocurrency stacking in the web3 space, where the user can hold crypto tokens belonging to the Proof of Stake blockchain network. In such a network, the blockchain validates new tokens in the network based on the amount of tokens held by users. The more tokens that users hold, the higher the percentage of returns they get.
Minal Thukral, executive vice president of growth and strategy at CoinDCX, said Earn is part of the “TDS-friendly products” the exchange plans to launch in the future, and has “experienced significant adoption” since its launch on May 26.
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Likewise, the trading platform WeTrade, which opened to users in May, is looking to target new users and investors with rewards for trading in cryptocurrencies. This includes a 1% “cashback” offer every time a user sells tokens on the platform, which covers tax fees withheld at source. Users also get 2% cashback every time they purchase tokens.
Besides cryptocurrency exchanges, traditional financial services are also joining the fray.
For example, American investment firm Vested Finance, which also provides services in India, has introduced an Exchange Traded Fund (ETF) for bitcoin. Viram Shah, CEO of Vested Finance, said in an interview that the ETF is designed to help traditional investors “diversify their portfolio.”
An ETF is a fund managed by an investment company that invests in a specific asset class, in this case Bitcoin, along with a number of market diversities. “Entering cryptocurrencies through an ETF works similar to investing in foreign stock markets, and can be much safer than investing directly in cryptocurrencies at the moment,” Shah said.
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