Chainalysis’ 2024 Global Crypto Adoption Index indicates that India continues to lead in grassroots crypto adoption worldwide, despite regulatory uncertainties and evolving public views on digital currencies. The index evaluates 154 countries based on metrics such as crypto transactions on various platforms, aiming to identify where individuals are investing the most in crypto. In addition to India, countries like Nigeria, Indonesia, the US, Vietnam, Ukraine, and Russia are among the top 10, showcasing strong crypto engagement in the Central and Southern Asia and Oceania region.
India’s resilience in maintaining its top position in crypto adoption is highlighted by Chainalysis, despite challenges such as shifting tax policies and regulatory uncertainties, including a ban on foreign crypto platforms in the previous year. The country’s 30% crypto capital gains tax and 1% tax deducted at source on transactions may be driving investors to international exchanges where such strict tax rules do not apply. However, these developments have not hindered crypto’s overall growth in India, according to the report.
Although India’s Financial Intelligence Unit (FIU) issued notices to nine offshore cryptocurrency exchanges for non-compliance with anti-money laundering regulations in December 2023, including well-known platforms like Binance and Huobi, users have found ways to bypass restrictions. Despite instructions to block these platforms’ URLs for Indian users, Chainalysis found that users could still access them through previously downloaded apps, with some apps still available for new downloads. The impact of these URL blockings on the crypto market in India was minor and short-lived, according to an analysis by the Esya Center.
Vikram Rangala, Executive Director at ZebPay, believes that the regulatory measures taken by the FIU may not have a lasting impact and hopes for clearer regulations to support India’s growing crypto and Web3 community. Additionally, the FIU is currently reviewing registration applications from four foreign crypto exchanges, with two expected to gain approval to operate in India by the end of the 2025 financial year. This suggests a potential shift in the regulatory landscape for crypto in India as authorities aim to create a more supportive environment for the industry.
Overall, India’s position as a global leader in grassroots crypto adoption remains strong, despite the challenges posed by regulatory uncertainties and shifting tax policies. The country’s ability to adapt to these challenges and maintain its top position in crypto adoption underscores the resilience of the Indian crypto community. With ongoing regulatory reviews and potential approvals for foreign exchanges, there is a possibility of a more conducive regulatory environment for crypto in India, supporting the growth of the sector and the broader Web3 ecosystem in the country.
