Chainalysis India ranks first in grassroots cryptocurrency adoption.

Chainalysis India Takes the Lead in Embracing Cryptocurrency at the Grassroots Level.

Source: Bitcoin World; Compilation: Song Xue, LianGuai

• India is leading in the adoption of grassroots cryptocurrencies globally, surpassing countries with more trading and mining activities, ranking second in terms of the original value received.

• In the past two years, the adoption rate of cryptocurrencies has declined globally, but despite facing regulatory challenges, India’s adoption rate remains strong.

• Indian investors face high taxes and are encouraged to use offshore exchanges, while stablecoins are popular in Pakistan due to economic instability.

  • Conference Guide Devconnect Istanbul 2023 Schedule and Surrounding Activities (Continuously Updated)
  • LianGuai Morning News | Indian grassroots cryptocurrency ranks first in Layer 2 with a total lock-up amount of 13.53 billion US dollars.
  • From Suspected Crypto Fraudster to Unexpected Guest The Intriguing Tale of Their Presence in South Korean President’s State Visit to Saudi Arabia

Chainalysis recently released the Global Cryptocurrency Adoption Index

According to the Global Cryptocurrency Adoption Index published recently by blockchain analysis platform, Chainalysis, India ranks first in grassroots cryptocurrency adoption. This measure appears in Chainalysis’ annual “Cryptocurrency Geography” report, which assesses the broader population’s acceptance of cryptocurrencies, not just trading volume.

Comparison of countries in the Middle, South Asia, and Oceania regions: Inflow share divided by platform type from January 2021 to June 2023

Most of India’s cryptocurrencies flow into centralized exchanges

In this index, India performs higher than other countries in bitcoin trading and mining activities. Additionally, when ranking countries based on the estimated cryptocurrency value from July 2022 to June 2023, India ranks second.

According to Chainalysis’ research, India has gained approximately $250 billion worth of cryptocurrencies in the past year, second only to the United States, which obtained around $1 trillion worth of cryptocurrencies during the same period.

India ranks first in the overall index, second in centralized service value ranking, third in retail centralized service value ranking, and fifth in P2P transaction volume ranking. Nigeria, Vietnam, the United States, Ukraine, the Philippines, and Indonesia closely follow India.

2023 Global Cryptocurrency Adoption Index

How does Chainalysis calculate cryptocurrency adoption rates?

Chainalysis estimates the transaction volume of various cryptocurrency services and protocols to measure global cryptocurrency adoption. This transaction volume is calculated based on the regional traffic of websites that provide cryptocurrency services and protocols. Although online traffic is not a good indicator of overall cryptocurrency usage, it allows Chainalysis to increase the overall reliability of its data, supported by millions of recorded transactions online.

According to official reports, Chainalysis is also collaborating with local cryptocurrency experts and operators around the world. This consulting process has increased the assurance and effectiveness of their assessment of global cryptocurrency adoption methods.

Global adoption rates are declining, with India leading the way

According to the survey, global cryptocurrency usage in the country has declined sharply over the past two years. After reaching a historic high in the first quarter of 2021, cryptocurrency usage has continued to decline and reached its lowest point in the fourth quarter of the 2023 fiscal year. Despite a slight increase in adoption rates in the past two quarters, they are still far from the previous numbers.

Despite growing concerns about the global economic recession, there is still a significant “fear of missing out” in the industry, but cryptocurrency adoption in India continues to expand. This finding from Chainalysis may surprise many people considering the Indian government’s taxation of domestic investors.

Asia, South Asia, and Oceania: Cryptocurrency value received by each country from June 2022 to June 2023

However, this may also be due to Indian investors having limited exposure to significant losses in cryptocurrency in 2022, such as the massive collapse of FTX. According to the chart below, Chainalysis research indicates that low- and middle-income countries, including India, significantly improved in the second quarter of 2022 and were able to maintain this level until the second quarter of 2023.

On the other hand, high-income countries like the United States and other European countries have seen a decrease. Research shows that institutional adoption rates in this region appear to have increased, with transactions worth $1 million or more accounting for 68.8% of the total transaction volume, higher than the previous period’s 57.6%.

Despite the uncertainty of tax laws, there has been an unprecedented surge in transaction volume.

According to Chainalysis analysis, India has surpassed some wealthier countries in the world to become the second-largest cryptocurrency market.

Despite ambiguous tax laws, transaction volume continues to soar

According to this study, “India is leading the world in grassroots adoption… but perhaps more impressively, India has become the world’s second-largest cryptocurrency market, surpassing several wealthy countries based on estimated transaction volume.”

According to the report, “India has a much higher tax rate on cryptocurrency activities compared to most other countries, taxing income at 30%” – a rate unique to Central Asia, South Asia, and Oceania, higher than the country’s tax rate on other investments such as stocks.”

In addition, Indian consumers must pay an additional 1% tax when using Indian centralized exchanges, which may be one of the reasons why Indian investors prefer offshore exchanges.

The above data shows that Indian IP addresses are increasingly accessing and trading on international exchanges, indicating that more and more Indian users are visiting international exchanges.

The survey also highlights the attractiveness of stablecoins in Pakistan, as the country’s economy is highly unstable. In Pakistan, stablecoins are used to hedge against the constant depreciation of the domestic currency and unpredictable inflation.

Conclusion

When stakeholders in the cryptocurrency industry demand comprehensive cryptocurrency regulations from the Indian government, they emphasize the potential benefits for entrepreneurs and investors.

Despite the government’s reserved stance on the growing nature of finance, cryptocurrency usage in India is increasing every day, paving the way for future comprehensive, industry-centric legislation.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!