According to Chainalysis, India maintains its position as the global leader in cryptocurrency adoption and use despite the country’s harsh stance and regulatory uncertainties towards cryptocurrency.
The Chainalysis Crypto Adoption Index assessed 154 states based on five measures, which included cryptocurrency transactions on P2P platforms, DEx, and CEx.
This metric aims to find out where residents of each country are investing the most in cryptocurrency.
Despite Offshore Exchange Ban And Strict Regulations, India Tops Global Crypto Adoption Index
The 2024 Global Crypto Adoption Index released by Chainalysis on Wednesday shows that despite its recent ban on offshore cryptocurrency exchanges and strict stance against digital assets, India still maintains global leadership in crypto adoption.
It is surprising how India has continued to lead in the global crypto adoption index, a position it maintained since the Chainalysis 2023 crypto adoption report.
This index only highlights India’s continuous resilience in maintaining global leadership in crypto adoption despite the country’s regulatory challenges, inconsistent tax policies, and recent ban on offshore crypto platforms.
The index concluded that
Regardless, these developments did not seem to hinder cryptocurrency’s overall growth in India, and it is the same for this year.
The Chainalysis 2024 index also positions Nigeria, Indonesia, the United States, Vietnam, Ukraine, and Russia accordingly among the top ten countries dominating the index.
This report highlights the strong use of cryptocurrency and its adoption in the Central and Southern Asia and Oceania (CSAO) regions.
India Banned Foreign Crypto Platforms, But Residents Bypass Restrictions
Chainalysis mentioned that the strict 30% capital gains tax and 1% TDS on crypto transactions imposed by the Indian government may be driving crypto investors to offshore crypto platforms, where such taxes do not apply.
However, last December, India’s Financial Intelligence Unit (FIU) sanctioned nine foreign crypto platforms, including Kraken, HTX, and Binance for non-compliance with anti-money laundering (AML) regulations.
Following the sanction, the FIU ordered the Ministry of Electronics and Information Technology (MeitY) to block the URLs of the nine platforms for Indian users.
Despite the ban, Chainalysis discovered that the Indian users on the nine banned exchanges were still able to access the exchanges and the total value received by these exchanges from Indian users did not change significantly.
While some were able to achieve this through VPNs, others claimed they accessed the exchanges through previously downloaded mobile applications.
Chainalysis found that the effect of the ban on India’s cryptocurrency market was minor and did not last.
Recent reports revealed that the FIU is currently considering registration applications from four offshore cryptocurrency platforms, with two expected to be approved in 2025 after a stringent compliance review.
