The Global Crypto Adoption Index report by Chainanalysis has revealed India's unexpected rise as the top global player in grassroots cryptocurrency adoption. This report assesses countries by measuring the extent to which their populations invest a substantial portion of their wealth in cryptocurrencies and the volume of cryptocurrency transactions conducted.
Despite a global decline in crypto adoption from its all-time highs, India has demonstrated resilience.
The Global Crypto Adoption Index showcased India’s impressive performance in categories such as the use of centralised and decentralised exchanges, lending protocols, and token smart contracts.
India has also risen to become the world's second-largest cryptocurrency market by estimated transaction volume, surpassing wealthier nations. This achievement is noteworthy considering India's decision to impose a high capital gains tax on crypto profits, exceeding the tax rate on other investments like equities.
In light of these hurdles, Indian Prime Minister Narendra Modi has voiced the need for a global framework to govern cryptocurrencies, underscoring the importance of regulating emerging technologies.
Several countries in the Central and Southern Asia and Oceania (CSAO) region have also secured top positions in the Global Crypto Adoption Index. Countries like Vietnam, the Philippines, Indonesia, Pakistan, and Thailand are among the top ten.
The Philippines sees a significant portion of its crypto web traffic going to gaming and gambling websites due to the popularity of the NFT-based game Axie Infinity. Meanwhile, Pakistan and Vietnam have experienced more crypto activity on peer-to-peer exchanges.
In the past year, Decentralised Finance (DeFi) has gained prominence in the CSAO area. It made up about 56 percent of all transactions from July 2022 to June 2023, which is much more than the 35.2 percent it represented in the year before. What's more, nearly 70 percent of these DeFi transactions are worth $1 million or higher, showing a growing institutional adoption of crypto in this region.
The report also highlights that total grassroots adoption is highest in lower middle-income (LMI) countries, including India, Nigeria. Grassroots adoption in these countries has surpassed levels observed in the third quarter of 2020. With approximately 40 percent of the world's population residing in LMI countries, they are crucial for the future of crypto adoption.
Despite recent ups and downs, the crypto market looks promising as institutional interest continues to rise worldwide. The data suggests that crypto's influence will play a substantial role in the future, particularly in regions like India and other LMI countries.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash