Chainalysis' 2023 crypto adoption index places India at the top of a list that measures grassroots cryptocurrency adoption across countries
India ranks first in terms of grassroots cryptocurrency adoption, according to blockchain analytics platform Chainalysis's 2023 Global Crypto Adoption Index released this month.
The Chainalysis Index, published as part of the annual 'Geography of Cryptocurrency' report, focuses on crypto adoption by everyday citizens, rather than simply measuring transaction volume.
Although India beats other countries that have high levels of crypto trading and mining, it also comes in second when looking at the top countries based on the estimated value of crypto received between July 2022 and June 2023. India recorded a crypto value of around $250 billion in last year, trailing only the US and the roughly $1 trillion recorded in value of crypto received during the same period.
A Chainalysis report shows that crypto adoption rates in India have soared despite the tax regime and regulatory environment in the country, which it calls “challenging”.
India currently taxes crypto profits at 30% and also deducts 1% at source.
“While every exchange operating in the country is required to collect TDS tax from users in India, many international exchanges do not do so effectively, which may attract Indian users to them compared to exchanges focused primarily on India,” the Chainalysis report noted. Pointing to increased web traffic from India to foreign crypto exchanges following the implementation of TDS last year.
The report observed that Indian exchanges are incurring losses due to these irregularities.
Domestic crypto exchanges have also faced legal action in the country. WazirX, for example, had its funds frozen and was investigated by the Enforcement Directorate (ED) last year.
“ED searched Director of Crypto Currency Exchange WazirX & froze his Bank assets worth Rs 64.67 Crore for helping accused Instant Loan App Company in fraudulent money laundering through purchase & transfer of virtual crypto assets,” the regulator tweeted on August 5, 2022.
Indian crypto traders invest in high-value assets like Bitcoin and Ether, but also enjoy meme-based assets like Dogecoin and Shiba Inu tokens.
