Despite the strict regulatory stance on the cryptocurrency sector, India has shown significant growth in adoption of cryptocurrencies. This week, blockchain research firm Chain Analysis released its “2024 Global Cryptocurrency Index”, with India ranking first among 151 countries. The country leads the overall adoption of cryptocurrencies, centralized service value and retail centralized service value. It is worth noting that this is the second consecutive year that India has won the first place, and it also ranked first in the world’s adoption of the highest grassroots cryptocurrency last year.
According to the chain analysis report, India belongs to Central Asia and South Asia and Oceania (CSAO) regions. The report highlights that the CSAO region leads the growth of the global cryptocurrency sector, with cryptocurrency asset inflows totaling approximately US$750 billion (approximately Rs 63.05 billion), from July 2023 to June 2024.
“CSAO dominates our 2024 index, with seven countries located in the region. “CSAO has a unique set of crypto markets with a high level of local cryptocurrency exchanges, merchant services and DEFI Activity. ”
Crypto landscape in India
In India, cryptocurrencies are considered virtual digital assets suitable for investment and transactions, although none of them are considered fiat currency along with the Indian Rupee (INR).
Since 2022, the government has imposed a 30% capital gains tax on crypto activities and deducted 1% tax (TDS) on each transaction. According to the Finance Department, this measure is crucial for tracking crypto transactions, which are often difficult to track due to their anonymity.
Last December, India stipulated that all companies handling cryptocurrencies must obtain operating licenses from the National Financial Intelligence Unit (FIU).
Despite these evolving regulations, crypto-related fraud and hacking incidents in India are still surging. In July, when hackers violated their wallets on Wazirx Exchange, the country’s cryptocurrency industry was shocked, resulting in losses of more than $230 million (about Rs 19 billion). Although Wazirx has been working with authorities such as Cert-In to investigate the violations, it is still awaiting an official statement from the Treasury Department.
Chain Analytics commented on India’s approach to the cryptocurrency sector, “The good news is that India’s approach to cryptocurrency has become increasingly obvious due to the ongoing participation between the industry and regulators. Although this shift is a recent shift , but we look forward to seeing how the cryptocurrency market in India will grow in the coming years.”
More observations from chain analysis
After India, Nigeria, Indonesia, the United States and Vietnam, they finished second, third, fourth and fifth in the entire cryptocurrency adoption rankings.
Meanwhile, Ukraine, Russia, the Philippines, Pakistan, Brazil and Türkiye are still ahead of the UK, despite the UK’s decision to bring comprehensive regulations to manage the cryptocurrency industry.
Chain Analysis reported that in 2023, the growth in crypto adoption is mainly driven by low- and middle-income countries. However, crypto-related activity has surged across all revenue ranges this year.
The report further notes that “from the fourth quarter of 2023 to the first quarter of 2024, the total value of global crypto activity has increased significantly, higher than the level in 2021 in the crypto bull market.”
The report shows that in the United States, the launch of Bitcoin ETFs has led to a significant increase in Bitcoin activity across all regions.
In discussing the U.S. cryptocurrency market, Chainalysis stressed that the country has the largest and most influential markets worldwide, with a large margin.
