The crypto industry in India has experienced limited growth due to rigorous taxation rules. India’s crypto community leaders suggest that introducing futures trading could mitigate the burden of taxes, allowing investors to continue trading cryptocurrencies. Nischal Shetty and Avinash Shekhar, who are both influential figures in India’s Web3 scene, spoke to Gadgets360 about the challenges imposed by the current crypto taxation and the potential benefits of offering futures trading services to revitalize interest in the typically volatile crypto assets.

ZebPay CEO Shetty and WazirX founder Shekhar have expressed their satisfaction with the success of crypto derivatives and its significant share in trading volumes. This factor among others has led to them unveiling their new futures exchange platform called ‘Pi42’ earlier this month.

Shetty emphasizes that the crypto market is seeking advanced trading tools and points out the rising interest for derivative trading in India, supported by India’s substantial smart contract volume in the global derivatives market in 2023. Derivative trading allows traders to speculate on price trends of an underlying asset, rather than physically trading the asset itself.

In contrast to spot trading, where cryptocurrency is traded at current market prices with a one percent Transaction Tax Deduction (TDS), futures and derivatives trading enable holders to speculate on price movements over a period. This approach can avoid the immediate TDS that is applicable to spot trades.

Shetty states that with a bull market potentially on the horizon, it’s important to create avenues for tax-efficient investment in the crypto market. Derivatives trading is an ideal way for investors to engage in cryptocurrency indirectly and yet remain abreast of market movements. He suggests that it serves as a window into the dynamic crypto space, as stated in a conversation with WazirX’s Shekhar on Gadgets360.

Shekhar indicated that while there is speculation about the government considering a TDS reduction to 0.01 percent for all crypto transactions, traders should remain active. From his experience, he claims a noticeable interest among young Indians in various crypto-related activities including staking, airdrops, and referral programs beyond just conventional trading.

He also noted that futures and derivatives markets are growing, with tight spreads and high liquidity. According to Shekhar, today’s investors are well-informed and tech-savvy, and many understand the importance of diversifying their portfolios. The intrigue for digital assets stems from its decentralization and various applications, which is what keeps users engaged.

With the launch of Pi42 Futures trading exchange in India, both veterans are now looking to expand internationally and leverage the global demand for alternative trading options to traditional assets.

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