India has emerged as a global leader in cryptocurrency adoption, topping the 2024 Global Crypto Adoption Index released by blockchain analytics firm Chainalysis. Despite the government’s ban on offshore exchanges like Binance, India’s cryptocurrency market has continued to thrive, solidifying the nation’s status as a central player in global crypto use.
In its fifth annual Global Crypto Adoption Index, Chainalysis ranked India first among 151 countries analysed. This was the second consecutive year India has topped the index, outpacing nations like Nigeria, Indonesia, and the United States. This strong position in global crypto use comes despite regulatory hurdles, particularly the ban on several offshore exchanges imposed by the country’s Financial Intelligence Unit (FIU).
India’s Global Crypto Use Leads the Way
India’s success in global crypto use, even amidst a challenging regulatory landscape, speaks to the resilience and adaptability of its crypto users. The FIU had imposed a ban on several prominent offshore exchanges, including Binance, HTX (formerly Huobi), Kraken, Gate.io, and others in December 2023, due to non-compliance with Anti-Money Laundering (AML) laws. Yet, despite this crackdown, Indian users continued to access these platforms through alternate means.
According to Chainalysis, as of April 2024, nearly 40% of the total usage of centralised exchanges (CEXs) in India came from the nine blocked exchanges. This highlights the sheer scale of India’s global crypto use, with citizens finding ways to navigate around regulatory restrictions.
“India’s position as the leader in global crypto use underscores the strong demand for cryptocurrency in the country. Despite the challenges presented by regulatory restrictions, Indian users have remained highly engaged in the market,” said Kim Grauer, Head of Research at Chainalysis.
Crypto Ban Fails to Halt Adoption
India’s FIU had marked nine offshore exchanges, including some of the biggest names in the crypto space, as non-compliant. Websites of these platforms were blocked for Indian users, but crypto traders quickly found workarounds. Mobile applications for some of these platforms remained accessible, allowing users to continue trading and contributing to India’s global crypto use figures.
“While regulatory bodies have taken a tough stance, the appetite for cryptocurrency in India is so strong that users have found ways to remain active on global platforms,” commented Rakesh Jain, a leading blockchain consultant based in Mumbai.
In fact, Chainalysis data showed that the ban on offshore exchanges had minimal impact on their overall use within the country. The exchanges targeted by the ban still handled a significant portion of the total crypto value received in India. This points to the robustness of India’s global crypto use and the determination of its users to stay engaged in the digital economy.
A Softer Regulatory Stance on the Horizon?
Interestingly, the Indian government’s stance on offshore exchanges appears to be shifting. In May 2024, both KuCoin and Binance were allowed to resume operations in India after paying fines for their previous non-compliance with local laws. This move suggests a potential easing of the tough regulatory stance and a growing recognition of the integral role that crypto exchanges play in global crypto use.
Local reports in early September 2024 indicated that the FIU might approve two additional offshore exchanges to restart operations. This development would further cement India’s position as a global leader in crypto adoption and potentially boost the country’s global crypto use even further.
“The fact that we’re seeing some offshore exchanges being allowed back into India shows that the government is starting to recognise the importance of these platforms in supporting the digital economy,” said blockchain expert Prashant Kumar, CEO of a major Indian crypto consultancy firm. “India’s global crypto use is only set to grow with more platforms back in the fold.”
India’s Crypto Inflows Rival Global Leaders
India’s dominance in global crypto use is also reflected in its crypto value inflows. Between July 2023 and June 2024, India received an impressive $143 billion in crypto assets, making it the second-largest recipient in the Central, Southern Asia, and Oceania (CSAO) region. Only Indonesia surpassed India with $157 billion in inflows, but India’s crypto receipts have solidified its standing in global crypto use.
In the CSAO region, which saw $750 billion in crypto inflows over the past year, India’s contribution is significant. The region accounts for 16.6% of global value received, with most of the activity driven by centralised exchanges. Large-scale transactions above $10,000 made up the largest share, indicating a high level of professional and institutional activity within the region.
“India has not only led in retail adoption but has also become a key player in institutional and professional crypto activity,” noted Kumar. “This is a huge driver of global crypto use and shows that India is becoming a hub for both individual traders and larger financial entities.”
Future Prospects for Global Crypto Use in India
With India ranking first in global crypto use for the second consecutive year, the future of the country’s crypto landscape looks bright. As regulatory clarity improves and more offshore exchanges regain access to the market, India is well-positioned to maintain its leadership in global crypto use.
“India’s lead in global crypto use sends a strong message to other countries about the potential of the crypto market, even in challenging regulatory environments,” said Grauer from Chainalysis.
As India continues to adapt to the evolving crypto space, the country’s role in the global crypto ecosystem will undoubtedly grow. Whether through retail or institutional adoption, India is set to remain a powerhouse in global crypto use, with its market dynamics influencing trends worldwide.
