Cryptocurrency adoption is increasing in India

Bitcoin currently has the same number of users as the internet had 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 have not been left behind. India is one of those nations where cryptocurrency adoption is increasing at a phenomenal pace.

India ranks second in the global cryptocurrency adoption index

A report by Chainalysis said that India ranked second in terms of cryptocurrency adoption among all nations in the world. On the other hand, the Finder report shows that India ranked first in the same index. This is happening despite the government’s attempt to discourage investment and adoption of cryptocurrencies by charging a 30% and 1% TDS on cryptocurrency transactions.

The most popular cryptocurrency owned by Indian citizens is Bitcoin, with 29.9% ownership as of April 2022. Second, we have Dogecoin, which became very popular this year after Elon Musk released it and is owned 23% of Indians. Other popular cryptocurrencies like Ethereum, Solana and Ripple are also on the top 10 list.

The current state of cryptocurrencies in India

According to cryptogorilla. withAn estimated 27 million people, 2.0% of India’s total population, currently own cryptocurrencies. Considering India has a population of over 1.4 billion people, that seems like a pretty small number. However, things are just getting started and if the government supports the regulations a little, India could lead in terms of mass adoption of cryptocurrencies.

But it will not be as easy as Indian banks, and especially the RBI has been quite restrictive towards cryptocurrencies. India’s FM also recently warned investors about the current investigations that cryptocurrency exchanges such as 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 perspective on cryptocurrencies. Furthermore, over time, as the cryptocurrency market grows and more countries take a positive approach towards the sector, Indian authorities cannot simply sit back.

The most important thing now is a better tax regime that does not strangle cryptocurrency 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 get smaller.

There is also a need for regulatory clarity that allows foreign exchanges and businesses to operate in India. Do you remember when Coinbase arrived in India and had to pause its operations due to UPI issues? Or when banks were sending notices to customers to transfer funds to cryptocurrency exchanges? These things can no longer happen, or adopting cryptocurrencies will be difficult.

India has the potential to lead the way in cryptocurrency adoption globally, with 50% of its population under the age of 25. Millennials have always been more accepting of new technologies, and the same is the case with cryptocurrencies.