At present, 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 the adoption of cryptocurrencies all across the world. While developed countries are surely ahead in terms of innovation, developing economies haven’t been left behind. India is one such nation where cryptocurrency adoption is rising at a phenomenal pace.
India ranks no 2 in the global cryptocurrency adoption index
A report from Chainalysis said that India ranked no 2 in terms of crypto adoption among all nations globally. On the other hand, Finder’s report shows that India ranked no 1 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 owned by Indian citizens is Bitcoin, with 29.9% ownership as of April 2022. At no 2, we have Dogecoin, which got really popular this year after Elon Musk hyped it up and is 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 to cryptogorilla.com, It is estimated that 27 million people, 2.0% of India’s total population, currently own cryptocurrency. Considering that India has a population of over 1.4 billion people, it seems to be a pretty small figure. However, things are just getting started, and if the government is a little supportive of regulations, India can lead the way in terms of the mass adoption of crypto.
But it won’t be as easy as Indian banks, and especially the RBI has been pretty restrictive about crypto. India’s FM has also recently warned investors about the current investigations that 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), which could change the country’s outlook on crypto. Plus, with time, as the crypto market gets bigger and more countries adopt a positive approach towards the sector, Indian authorities cannot simply just sit around.
The most important thing right now is a better tax regime that doesn’t strangle crypto investors. For example, according to the current rules, investors cannot offset losses with profits, and the 30% tax is also a flat rate. This makes trading incredibly difficult, and profit margins get slimmer.
There is also a need for regulatory clarity that allows foreign exchanges and businesses to operate in India. Do you remember when Coinbase came to India and had to pause its operations due to UPI problems? Or when banks were sending notices to customers for transferring funds to crypto exchanges? These things cannot happen anymore, or crypto adoption will be difficult.
India does have the potential to lead crypto adoption globally, with 50% of its population below the age of 25. Millennials have always been more accepting of new technologies, and the same is the case for crypto.