Currently, Bitcoin has the same number of users as the internet did in 1999. It paints a pretty clear picture of where we are in terms of cryptocurrency adoption around the world. While developed countries are certainly ahead in terms of innovation, emerging markets have not been left behind. India is one such nation where cryptocurrency adoption is increasing at a phenomenal rate.
India ranks 2nd in the global cryptocurrency adoption index
A report by Chainalysis states that India ranks 2nd among all nations worldwide in terms of crypto adoption. On the other hand, Finder’s report shows that India ranks #1 on the same index. This comes despite the government trying to discourage crypto investment and adoption by imposing a 30% and 1% TDS on crypto transactions.
The most popular crypto owned by Indian citizens is Bitcoin with a share of 29.9% as of April 2022. At number 2 we have Dogecoin which became very popular this year after Elon Musk hyped it and is 23% owned by Indians . Other popular cryptocurrencies like Ethereum, Solana, and Ripple also make the top 10 list.
The Current State of Crypto in India
Corresponding cryptogorilla.comIt is estimated that 27 million people, 2.0% of the total population of India, currently own cryptocurrency. Considering that India has a population of over 1.4 billion people, that seems like a pretty small number. However, things are just getting started and with a little government support for the regulations, India can lead the way in terms of mass crypto adoption.
But it won’t be as easy as it is with Indian banks, and the RBI in particular has been quite restrictive on crypto. India’s FM also recently warned investors about the current investigations crypto exchanges like WazirX and Vauld are facing over money laundering and KYC issues.
What can we expect in the future?
India is working on a CBDC (Central Bank Digital Currency) that could change the country’s attitude towards crypto. Also, with time, as the crypto market grows and more countries adopt a positive approach towards the sector, Indian authorities cannot just sit around.
The most important thing right now is a better tax regime that doesn’t strangle crypto investors. For example, under the current rules, investors cannot offset losses against profits, and the 30 percent tax is also a flat rate. This makes trading incredibly difficult and profit margins get smaller.
There is also a need for regulatory clarity that will allow foreign exchanges and companies to operate in India. Remember when Coinbase came to India and had to shut down its operations due to UPI issues? Or when banks sent notices to customers for transferring funds to crypto exchanges? These things can’t happen anymore, or crypto adoption will be difficult.
India has the potential to lead crypto adoption globally, with 50% of its population being under the age of 25. Millennials have always been more accepting of new technologies, and the same is true of crypto.