India has claimed the top spot in global cryptocurrency adoption, outpacing traditional crypto hubs and defying its own stringent regulatory environment.
This revelation comes from the latest report by blockchain analytics firm Chainalysis, which places India at the forefront of the Central & Southern Asia and Oceania (CSAO) region – the third-largest crypto market globally.
The CSAO region, accounting for over $750 billion in crypto inflows between July 2023 and June 2024, sees India as a key driver of growth.
Despite facing a 30% capital gains tax and a 1% tax deducted at source (TDS) on all transactions, the Indian crypto ecosystem has shown remarkable resilience and expansion.
India’s market resilience
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India’s crypto journey hasn’t been without its challenges. In December 2023, the country’s Financial Intelligence Unit (FIU) cracked down on nine major offshore exchanges.
These include giants like Binance and Kraken for non-compliance with anti-money laundering laws. However, this move seemed to have only a short-lived impact on the market.
Vikram Rangala, Executive Director of Indian exchange ZebPay, noted, “I hope that, with regulatory clarity, we’ll also get a more workable tax arrangement that promotes innovation and brings all aspects of crypto and Web3 into the economy in a sustainable way.”
Interestingly, the regulatory landscape is showing signs of evolution. Binance, previously blocked, has recently re-entered the Indian market after registering as a reporting entity.
The Indian crypto market’s resilience is further evidenced by its continued activity even after the December 2023 restrictions. Data shows that the total value received by blocked exchanges remained relatively stable compared to the overall Indian crypto market.
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This growth isn’t just about trading volumes. India is fostering a vibrant ecosystem of crypto and Web3 startups. As Rangala puts it, “There are a lot of brilliant Indian crypto startups. When they are finally given a healthy environment to work in, I think they’ll unleash magic. Think 100 Polygons and more.”
