India has claimed the top spot in Chainalysis’ 2023 Global Crypto Adoption Index despite stringent tax regulations in the country.
Chainalysis, a global blockchain surveillance firm, recently released an excerpt from its annual crypto adoption report, shedding light on how various countries are embracing digital currencies.
The Global Crypto Adoption Index evaluated more than 150 countries based on several metrics to gauge grassroots adoption of cryptocurrency.
Indian Government Fails to Curb Crypto Adoption Through Heavy Tex Regulations
India currently imposes high taxes on crypto gains and mandates a tax on every crypto trade. However, this hasn’t deterred Indians from actively participating in the crypto ecosystem.
In an interview with CryptoNews, Chief Public Policy Officer at CoinDCX, Kiran Mysore Vivekananda, said:
“Last year when India introduced TDS (Tax Deducted at Source), their intention was to discourage people from investing in crypto. Now the Chainalysis report shows India as the leading country in adopting crypto. And our data shows that 18% of active users in the top five foreign exchanges are Indians. That clearly shows that adoption has not come down. So the purpose of introducing TDS has failed.”
He further emphasized on the importance of a global consensus on taxation.
After the government introduced heavy taxation on crypto transactions, most crypto users in India turned to P2P mode on foreign exchanges, driving volume on local exchanges to an all-time low.
Weaker Economies See Rise in Crypto Adoption
India’s leading position is followed closely by Nigeria and Vietnam, indicating a noticeable trend of increasing crypto adoption in Central and Southern Asia, as well as Sub-Saharan Africa.
The United States ranks fourth on the index, while Ukraine rounds out the top five.
One intriguing finding from the report is that individuals in economically weaker countries tend to allocate a larger portion of their funds to cryptocurrencies.
These countries have witnessed the most significant recovery in grassroots crypto adoption over the past year.
This suggests that in regions where traditional financial infrastructure is less developed or accessible, digital currencies are increasingly filling an important financial gap.