India Tops Global Crypto Adoption for Second Consecutive Year: Report

India Tops Global Crypto Adoption for Second Consecutive Year: Report

India has once again emerged as the global leader in cryptocurrency adoption, despite stringent regulatory measures an high trading taxes, according to a report by blockchain analytics firm Chainalysis released on Wednesday. The report, which analyzed crypto adoption in 151 countries from June 2023 to July 2024, found that India ranked high in the use of both centralized exchanges and decentralized finance (DeFi) assets.

India's tough stance on cryptocurrencies has been in place since 2018, with the Financial Intelligence Unit (FIU) issuing show-cause notices to nine offshore crypto exchanges in December 2023 for non-compliance with local regulations. Despite these restrictions, crypto adoption in India has continued to grow, indicating that new participants are finding ways to engage with the market through services not subject to bans.

"India has seen a broad level of adoption across different types of crypto assets despite regulatory hurdles," said Eric Jardine, research lead at Chainalysis. "With some restrictions now being eased, such as Binance's return, we expect this adoption to increase further."

Binance, the world's largest cryptocurrency exchange, was fined ₹18.82 crore ($2.25 million) in June 2024, a month after registering with the FIU in a bid to restart its operations in India. KuCoin, another crypto exchange, registered with the watchdog in March and received a smaller fine of ₹34.5 lakh.

The report also highlighted strong decentralized transaction volumes in countries with lower purchasing power, where retail-sized transfers (under $10,000) played a significant role. Indonesia, which has banned the use of cryptocurrencies for payments but allows investment in digital assets, saw $157.1 billion in inflows in the 12 months leading to July 2024.

India's continued leadership in crypto adoption, despite regulatory challenges, underscores the resilience of the country's crypto market and its growing significance in the global digital asset ecosystem.