India Ranks First in Global Crypto Adoption as Total Market Activity Hit an All-Time High Earlier This Year, Chainalysis Says
The blockchain forensics firm uses four categories to rank countries by their users' crypto habits
India ranks first in terms of global crypto adoption while activity in the $2 trillion digital asset market rose to its highest-ever level earlier this year before falling slightly in the second quarter, according to new research from blockchain forensics firm Chainalysis.
“Between the fourth quarter of 2023 and the first quarter of 2024, the total value of global crypto activity increased substantially, reaching higher levels than those of 2021 during the crypto bull market,” the firm said in its annual Global Crypto Adoption Index findings. India ranked highly in the Chainalysis findings last year, and despite some regulatory uncertainty and high tax rates, emerged in 2024 as the country whose users are most-accepting of crypto across four categories, according to the study.
In December, Indian regulators said eight exchanges, including Binance, Kraken, Bitstamp and Bitfinex, didn’t adhere to their anti-money laundering rules and had their Internet access to Indian users blocked, according to Chainalysis. The block didn’t really work, however, as shown by the activity levels after the embargo was put in place, Chainalysis said.
Courtesy of Chainalysis
“Contacts in the region explained to us that users were still able to access these exchanges if they had previously downloaded the apps and that certain apps were still accessible for new downloads,” Chainalysis said in the report. “Interestingly, the Indian think tank Esya Center analyzed the impact of blocking of the URLs on the virtual digital asset market and found it to be short-lived.”
Vikram Rangala, executive director of ZebPay, an India-based cryptocurrency exchange and wallet provider, said to Chainalysis that India has numerous crypto startups that only want to know the rules they must follow.
“Now we’re seeing that offshore exchanges will soon be brought into this emerging ecosystem,” Rangala said to Chainalysis, according to the report. “Earlier, we had a flight of investors away from Indian exchanges to global exchanges because of high taxes. 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.”
India is part of the region of Central and Southern Asia and Oceania (CSAO) as categorized by Chainalysis. Like last year’s finding, the region sits third in terms of crypto adoption behind North America and Western Europe.
“Crypto activity in CSAO is driven by centralized exchanges, with transfers in sizes above $10,000 representing the largest share of value received, suggesting substantial professional and institutional activity,” Chainalysis said.
The forensics firm scores countries on four categories to rank their crypto adoption -- on-chain cryptocurrency value received by centralized services, on-chain retail cryptocurrency value received by centralized services, on-chain cryptocurrency value received by DeFi protocols and on-chain retail cryptocurrency value received by DeFi protocols. All categories are weighted by by purchasing power parity per capita for the given country, according to Chainalysis.
By that measure, India is followed this year in crypto adoption by Nigeria, Indonesia, the U.S. and Vietnam for the top five spots, Chainalysis said.
Another member country of CSAO, Singapore, is seeing a boom in merchant payments via cryptocurrency, Chainalysis said.
Courtesy of Chainalysis
“In the second quarter of 2024, the total value in crypto received by merchant services in Singapore reached nearly $1 billion — significantly higher than any other quarter in the past two years,” the firm said in the report. “This trend of crypto payments is interesting in a market where retail fiat payment systems are already highly efficient, as it hints at the ubiquity of crypto holdings among the population.”