Cryptocurrency adoption is growing in India – TechStory
- Nanna Course
- on Aug 27, 2022
Today, 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, developing economies are not left behind. India is one such country where cryptocurrency adoption is growing at a phenomenal rate.
India Ranks Second in Global Cryptocurrency Adoption Index
A report by Chainalysis stated that India ranks second in terms of crypto adoption among all nations in the world. On the other hand, Finder’s report shows that India ranks first on the same index. This is happening despite the government’s attempt to discourage crypto investment and adoption by levying a 30% and 1% TDS on crypto transactions.
The most popular crypto held by Indian citizens is Bitcoin, with 29.9% ownership as of April 2022. At #2 we have Dogecoin, which became very popular this year after Elon Musk promoted it and owned by 23% Indians. Other popular cryptocurrencies like Ethereum, Solana, and Ripple are also on the top 10 list.
The Current State of Crypto in India
According cryptogorilla.comIt is estimated that 27 million people, or 2.0% of the total population of India, currently own cryptocurrency. Considering that India has a population of over 1.4 billion, that seems like a pretty low figure. However, things are just getting started, and if the government supports a little regulation, India can lead the way in terms of mass adoption of crypto.
But it will not be as easy as Indian banks, and especially the RBI has been quite restrictive when it comes to crypto. Indian FM also recently warned investors about ongoing investigations facing crypto exchanges like WazirX and Vauld regarding money laundering and KYC issues.
What can we expect in the future?
India is working on a CBDC (central bank digital currency), which could change the country’s outlook on crypto. Moreover, over time, as the crypto market grows bigger and more countries adopt a positive approach towards the sector, Indian authorities cannot simply sit still.
The most important thing right now is a better tax regime that doesn’t strangle crypto investors. For example, under current rules, investors cannot offset losses against profits, and the 30% tax is also a flat rate. This makes trading incredibly difficult and profit margins shrink.
There is also a need for regulatory clarity that allows stock exchanges and foreign companies to operate in India. Do you remember when Coinbase came to India and had to suspend operations due to UPI issues? Or when banks sent notices to customers for transferring funds to crypto exchanges? These things can no longer happen, or crypto adoption will be difficult.
India has the potential to lead the adoption of crypto globally, with 50% of its population under the age of 25. Millennials have always been more supportive of new technologies, and the same goes for crypto.