India has maintained its position as a global leader in grassroots crypto adoption, according to Chainalysis’ 2024 Global Crypto Adoption Index. The index evaluates 154 countries based on metrics such as crypto transactions on centralized exchanges, DeFi platforms, and peer-to-peer trading. India has held the top spot since the 2023 report, with Nigeria, Indonesia, the US, Vietnam, Ukraine, and Russia also ranking in the top 10. This highlights the strong engagement with crypto in the Central and Southern Asia and Oceania (CSAO) region.
Despite regulatory uncertainties and evolving public views on digital currencies, India’s crypto adoption remains strong. Chainalysis noted India’s resilience in maintaining its position, even with shifting tax policies and regulatory challenges, including a ban on foreign crypto platforms. The country imposes a 30% crypto capital gains tax and 1% tax deducted at source on transactions, potentially driving investors to international exchanges with less strict tax rules. However, these developments have not hindered overall growth in the crypto sector in India.
In December 2023, India’s Financial Intelligence Unit (FIU) issued notices to nine offshore cryptocurrency exchanges, including Binance, HTX (formerly Huobi), and Kraken, for non-compliance with anti-money laundering regulations. The FIU instructed the Ministry of Electronics and Information Technology to block these platforms’ URLs for Indian users. Despite these restrictions, users have found ways to bypass them, accessing the exchanges through previously downloaded apps or new downloads. The impact of these URL blockings on the crypto market was minimal and short-lived, according to an analysis by the Esya Center.
Vikram Rangala, Executive Director at ZebPay, believes that these regulatory measures may not be permanent and hopes for clearer regulations to support India’s growing crypto and Web3 community. The FIU is now 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. Chainalysis’ report highlights India’s ability to navigate regulatory challenges while maintaining a strong position in the global crypto adoption landscape.
Overall, India’s crypto resilience shines through amid shifting tax policies, platform bans, and regulatory uncertainties. The country’s continued leadership in grassroots crypto adoption, as highlighted by Chainalysis’ Global Crypto Adoption Index, showcases the strong engagement with digital currencies in the region. Despite challenges such as tax regulations and restrictions on offshore exchanges, India’s crypto community remains resilient and actively engages with the global crypto ecosystem. As the regulatory landscape continues to evolve, stakeholders in the Indian crypto market remain optimistic about the future and look forward to clearer regulations to support the growing industry.
