India has led the global adoption of cryptocurrencies for the second year in a row as investors defied the country’s strict regulations and high trading taxes, a report from blockchain analytics firm Chainalysis showed on Wednesday.
The report, which tracks adoption across four subcategories in 151 countries, found that India scored high in the use of centralized exchange and decentralized financial assets from June 2023 to July 2024.
India has been cracking down on cryptocurrencies since 2018. In December 2023, the Financial Intelligence Unit (FIU) issued warnings to nine offshore crypto exchanges for failing to comply with local regulations.
“India also has a fairly broad adoption rate of various cryptocurrencies despite the restrictions. This means that new participants in crypto are entering through services that are not prohibited,” said Eric Jardine, research lead at Chainalysis.
“We are now seeing some of those restrictions being rolled back, for example at Binance, and that will likely only increase adoption in the country.”
Binance, the world’s largest cryptocurrency exchange, was fined 188.2 million rupees ($2.25 million) in June, a month after it registered with the FIU in a bid to resume operations in the country. Crypto exchange KuCoin had registered with the watchdog in March but was given a smaller fine of 3.45 million rupees.
Seven of the top 20 countries on Chainalysis’ global adoption index are from Central and South Asia, including Indonesia, Vietnam and the Philippines.
The total decentralized transaction volume executed in retail-sized transactions, worth less than $10,000 (approximately Rs 8.3 lakh), was recorded in countries with lower per capita purchasing power, the report said.
Trading was robust in Indonesia, which has banned the use of cryptocurrencies as a means of payment but allows investment in the assets. The country recorded $157.1 billion (roughly Rs. 13,19,248 crore) inflows into digital asset trading in the 12 months through July, the report said.
© Thomson Reuters 2024
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