India has once again been recognized as the leading country in cryptocurrency adoption globally, as highlighted by a recent study from blockchain analytics company Chainalysis.
This achievement marks the second consecutive year that India has topped the list, showcasing sustained interest from investors who are actively engaging with digital assets despite the challenging regulatory framework and elevated trading taxes in the country.
The Growing Crypto Landscape in India
The Chainalysis report evaluates cryptocurrency adoption across four specific sub-categories in 151 countries, highlighting India’s robust performance in centralized exchanges and decentralized finance (DeFi) assets from June 2023 to July 2024.
Even amid a stringent regulatory approach towards cryptocurrencies since 2018, the report reveals that India has made significant strides in the adoption of various crypto assets. Eric Jardine, the research lead at Chainalysis, indicated that this trend reflects the ability of new participants to engage with cryptocurrencies through services that are still operating legally.
India’s regulatory landscape has presented distinct challenges. In December 2023, the Financial Intelligence Unit (FIU) issued show-cause notices to nine offshore cryptocurrency exchanges for not adhering to local regulations. Nonetheless, recent updates suggest a slight relaxation in these limitations.
For example, Binance, the largest crypto exchange by trading volume, registered with the Financial Intelligence Unit (FIU) in June, and faced a penalty of 188.2 million rupees (approximately $2.25 million) as part of its efforts to resume operations in India. Similarly, KuCoin registered with the FIU in March and incurred a smaller fine of 3.45 million rupees.
Impact of Bitcoin ETF Launch on Global Transactions
The report also reveals that seven out of the top twenty countries in Chainalysis’ global adoption index are situated in Central and South Asia, including Indonesia, Vietnam, and the Philippines.
Indonesia, in particular, experienced substantial trading activity, with $157.1 billion in digital asset inflows over the past year, despite a ban on using cryptocurrencies for payments.
Remarkably, the launch of Bitcoin exchange-traded funds (ETFs) in the United States has had a significant impact on global cryptocurrency activity. The report notes that this event sparked a marked increase in Bitcoin transactions across various regions, especially in North America and Western Europe, where institutional-sized transfers have shown considerable year-over-year growth.
Furthermore, the report highlights a significant rise in DeFi engagement in regions like Sub-Saharan Africa, Latin America, and Eastern Europe. This growth may have contributed to an increase in altcoin transactions, indicating a broader interest in various digital assets beyond Bitcoin.
As of now, Bitcoin, the largest cryptocurrency by market capitalization, continues to show significant volatility. In the last 24 hours, the leading crypto has struggled to maintain its trading price of $57,650, following a brief dip towards $55,000 earlier on Wednesday.
Image provided by DALL-E, chart from TradingView.com
