India has once again emerged as a global leader in cryptocurrency adoption for the second consecutive year, according to a report from blockchain analytics firm Chainalysis released on Wednesday. Despite the country's stringent regulatory measures and high trading taxes, investors have continued to engage with digital assets. The report, which monitors adoption across four sub-categories in 151 countries, highlights India's significant usage of centralized exchanges and decentralized finance assets from June 2023 to July 2024.
Since 2018, India has maintained a tough stance on cryptocurrencies, with the Financial Intelligence Unit (FIU) issuing show-cause notices to nine offshore cryptocurrency exchanges in December 2023 for failing to comply with local regulations. Eric Jardine, the research lead at Chainalysis, noted that despite these restrictions, India has seen widespread adoption across various crypto assets, suggesting that new participants have been entering the market through unbanned services.
Recent developments indicate a softening of these restrictions, such as Binance's registration with the FIU in June 2023, which is expected to further boost adoption in the country. Binance, the world's largest crypto exchange, was fined 188.2 million rupees ($2.25 million) in June, a month after it registered with the FIU in an attempt to resume operations in India. Meanwhile, KuCoin, another major exchange, registered with the watchdog in March but faced a smaller penalty of 3.45 million rupees.
Chainalysis' global adoption index reveals that seven of the top 20 countries are from Central and South Asia, including Indonesia, Vietnam, and the Philippines. The report also found that decentralized transaction volumes in retail-sized transfers, under $10,000 worth of crypto, were higher in countries with lower per capita purchasing power. Indonesia, despite banning the use of cryptocurrencies as a means of payment, recorded $157.1 billion in digital asset trading inflows over the 12 months to July, indicating robust trading activity.
