India Tops Global Crypto Adoption For Second Straight Year Despite Regulatory Hurdles & High Taxes

Centre To Release Cryptocurrency Discussion Paper Before September

SUMMARY

India ranked high in the use of centralised exchanges and decentralised finance assets between June 2023 and July 2024

A report by blockchain analytics said that while crypto adoption growth last year was mainly driven by lower-middle-income countries, this year saw increased activity across all income brackets, with high-income countries experiencing a decline since early 2024

Since 2018, India has maintained a strict stance on cryptocurrencies, with the Financial Intelligence Unit (FIU) issuing show-cause notices to nine offshore exchanges in December 2023 for non-compliance with local regulations

As investors navigate the country’s stringent regulations and high trading taxes, India continues to lead in global cryptocurrency adoption for the second consecutive year, according to a report by blockchain analytics firm Chainalysis.

The report said that while crypto adoption growth last year was mainly driven by lower-middle-income countries, this year saw increased activity across all income brackets, with high-income countries experiencing a decline since early 2024.

As per the report, India ranked high in the use of centralised exchanges and decentralised finance assets between June 2023 and July 2024. The report tracks adoption across four sub-categories in 151 countries.

In June, Binance, the world’s largest crypto exchange, was fined INR 18.82 Cr ($2.25 Mn) just a month after registering with India’s Financial Intelligence Unit (FIU) to resume operations. KuCoin, another crypto exchange, registered with the FIU in March but received a smaller penalty of INR 34.5 Lakh. Notably, seven of the top 20 countries in Chainalysis’ global adoption index were from Central and South Asia, including Indonesia, Vietnam, and the Philippines.

The report added that countries with lower purchasing power saw significant decentralised transactions under $10,000. In Indonesia, where cryptocurrencies are banned as a payment method but allowed for investment, digital asset trading reached $157.1 Bn in inflows over the year ending in July.

This comes at a time when earlier today, Inc42 reported that the Finance Ministry’s Financial Intelligence Unit (FIU) will hear the petitions of seven offshore crypto platforms seeking to restart operations in India.

Exchanges such as Bitfinex, MEXC Global, Kraken, Huobi, Gate.io, Bittrex, and Bitstamp will present their cases later this week. These platforms were previously banned for violating the Prevention of Money Laundering Act (PMLA) but could resume operations after settling an estimated INR 2,900 Cr in pending GST.