India has once again emerged as the global leader in cryptocurrency adoption, according to a recent report by blockchain analytics firm Chainalysis. For the second consecutive year, India has topped the charts, demonstrating a continuous interest among investors who remain engaged with digital assets despite the country’s challenging regulatory environment and high trading taxes.
India’s Expanding Crypto Landscape
The Chainalysis report, which evaluates adoption across four specific sub-categories in 151 countries, highlights India’s strong performance in both centralized exchanges and decentralized finance (DeFi) assets from June 2023 to July 2024. Despite a tough regulatory stance towards cryptocurrencies since 2018, the report underscores that India has shown a significant breadth of adoption across various crypto assets.
Eric Jardine, the research lead at Chainalysis, noted that this suggests new participants are finding ways to engage with cryptocurrencies through services that remain unbanned. India’s regulatory framework has been particularly challenging. In December 2023, the Financial Intelligence Unit (FIU) issued show-cause notices to nine offshore cryptocurrency exchanges for failing to comply with local regulations. However, recent developments indicate a slight easing of these restrictions.
For instance, the world’s largest crypto exchange by trading volume, Binance, registered with the Financial Intelligence Unit (FIU) in June and subsequently faced a fine 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 faced a smaller penalty of 3.45 million rupees.
Bitcoin ETF Launch Sparks Surge In Global Transactions
The report also highlights that seven of the top twenty countries in Chainalysis’ global adoption index are in Central and South Asia, including Indonesia, Vietnam, and the Philippines. Notably, Indonesia recorded substantial trading activity, reporting $157.1 billion in digital asset inflows over the past year despite a ban on using cryptocurrencies for payment.
Interestingly, the launch of Bitcoin exchange-traded funds (ETFs) in the United States has further influenced global cryptocurrency activity. The report indicates that this event triggered a significant increase in Bitcoin transactions across various regions, particularly in North America and Western Europe, where institutional-sized transfers saw robust year-over-year growth.
Additionally, the report highlights a notable increase in DeFi activity in regions such as Sub-Saharan Africa, Latin America, and Eastern Europe. This uptick has likely contributed to a rise in altcoin transactions, reflecting a growing interest in diverse digital assets beyond Bitcoin.
Bitcoin’s Current Market Performance
At the time of writing, the largest cryptocurrency on the market, Bitcoin, continues to record significant volatility. In the span of 24 hours, Bitcoin is struggling to make foot above its current trading price of $57,650 after a brief dip towards $55,000 earlier on Wednesday.
