India Leads Global Crypto Adoption Despite Ban on Offshore Exchanges

• India remains the leader in global cryptocurrency adoption despite regulatory challenges.
• The ban on offshore exchanges has not significantly reduced their usage in India, and regulatory adjustments are ongoing.

In 2024, India continues to lead the world in cryptocurrency adoption, per the most recent Chainalysis analysis. The country continues to lead the Chainalysis Global Crypto Adoption Index, outperforming nations like as Nigeria, Indonesia, the United States, and Vietnam. Based on the value of on-chain cryptocurrency received by retail categories and centralized exchanges (CEX) and decentralized finance (DeFi) services, the index ranks the countries.

Despite the ban on offshore exchanges implemented by India’s Financial Intelligence Unit (FIU) in December 2023, the country remains a key player in the cryptocurrency market. The FIU identified popular exchanges including Binance, Kraken, and KuCoin as non-compliant with India’s anti-money laundering regulations and directed the Ministry of Electronics and Information Technology to restrict them. However, Chainalysis data suggests that these restricted exchanges continue to account for a considerable amount of CEX usage in India, accounting for almost 40% of total CEX value as of April 2024.

Continued Access and Regulatory Adjustments

Although the FIU’s ban initially limited access, Indian users have continued to interact with these trades via alternative channels. The ban’s impacts appear to be limited, with users accessing restricted markets through applications or other trading platforms. Recent reports indicate that the FIU is changing its attitude, having registered KuCoin and Binance after paying fines in May 2024. In addition, the FIU is considering allowing new offshore exchanges for operations in India.

Sumit Gupta, CEO of CoinDCX, announced on Twitter: “India ranks first in Chainalysis’s Global Crypto Adoption Index for the second year in a row! Despite unclear legislation and high taxation, India’s cryptocurrency movement continues to flourish!”

South Asian countries such as Indonesia, Vietnam, and the Philippines rank among the top 20 in terms of cryptocurrency usage. In Indonesia, where cryptocurrencies are prohibited as a payment method but permitted for investment, trading totaled $157.1 billion in the year preceding July.

India’s sustained supremacy in global cryptocurrency adoption, despite a tough legal environment, demonstrates the country’s strong and growing interest in digital assets. The broad acceptance of both regulated and decentralized systems reflects investor confidence in the cryptocurrency sector.The CSAO region experienced $750 billion in crypto inflows, fueled mostly by significant professional and institutional activity via CEXs.