India Surpasses Europe in Crypto Transaction Volume
According to the 2023 Global Cryptocurrency Adoption Index by Chainalysis, India now leads in digital asset adoption and ranks second in the volume of cryptocurrency transactions.
Analyst data shows that last year, India acquired $250 billion in cryptocurrencies, trailing only behind the United States, where citizens bought $1 trillion worth of digital assets in the same timeframe.
India has secured top positions in several categories:
- Overall ranking in the index;
- Rankings for the value of institutional centralized services;
- Ranking for the value of retail DeFi services.
Additionally, India is ranked fifth in the volume of P2P transactions.
Nigeria, Vietnam, and Ukraine have also made it into the top five.
The 2023 Global Crypto Adoption Index. Source — Chainalysis.com
A recent survey of retail investors in India reveals a notable decline in cryptocurrency trading over the past two years. This dip is largely attributed to regulatory pressure and the government's push for the digital rupee.
While crypto activity peaked in Q1 2021, it has steadily declined, reaching its lowest point in Q4 of the 2023 fiscal year.
Interestingly, this decline doesn't contradict the overall growth narrative in India. The surge is now fueled by increasing institutional interest, with transactions exceeding $1 million constituting 68.8% of the total volume, a significant jump from 37.6% just a year ago.
Major Indian investors are showing heightened interest in cryptocurrency, diverging from their European and American counterparts who suffered losses in the 2022 FTX collapse.Analysts speculate that retail traders may be concealing transactions, potentially in preparation for reporting crypto income.
The notable increase in traffic from Indian IP addresses on international exchanges suggests more Indian traders accessing global platforms and conducting transactions under different jurisdictions.
A recent law on taxing virtual assets in India, effective from 2023, marks a significant shift in the country's regulatory landscape. For more information on India's legal and regulatory framework, refer to our previous article.
Despite uncertainty surrounding tax legislation, Chainalysis researchers report an unprecedented growth in the total volume of transactions.
This aligns with findings from Electric Capital, revealing that developers from India and Ukraine are outpacing their North American counterparts in the blockchain race.