Despite regulatory limbo, India tops global grassroots crypto adoption ranking: Chainalysis Report

Cryptocurrencies are finding their way into the lives of middle-class people in India, Nigeria, and Thailand. A recent report by crypto research firm Chainalysis highlights the growing grassroots adoption of digital assets in these countries.

India has taken the top spot in the Global Crypto Adoption Index, which ranks 154 countries. This indicates that cryptocurrency culture is becoming a part of everyday financial and investment activities for Indians. Following India, other countries like Nigeria, Vietnam, the US, and Ukraine secured the second, third, fourth, and fifth rankings, respectively.

India's strong performance in crypto transactions

In the Chainalysis index, India stands out with the highest crypto transactions recorded in both retail and non-retail decentralised finance (DeFi) transactions. The country also ranks fifth in peer-to-peer exchange trade volume, while Nigeria leads in this category.

Grassroots adoption in lower middle income countries

Chainalysis notes that lower middle income (LMI) countries have experienced significant growth in grassroots crypto adoption over the past year. LMI countries are those with a gross national income (GNI) per capita ranging from $1,086 to $4,255 (approx Rs.90144 to Rs. 353,000). India, Ukraine, and Nigeria fall into this category.

We’re excited to release our fourth annual Global Crypto Adoption Index! Check out our blog to see 2023’s top countries for grassroots crypto adoption along with some key takeaways. https://t.co/czQb7cXhqP— Chainalysis (@chainalysis) September 12, 2023

The future of crypto in LMI nations

With industrialisation and population growth on the rise in LMI countries, which make up over 40 percent of the world's population, Chainalysis predicts that crypto adoption will play a substantial role in the global fintech future.

Crypto adoption beyond high-income nations

While high-income countries tend to lead in terms of raw transaction volumes, grassroots crypto adoption focuses on everyday people embracing cryptocurrencies. Chainalysis emphasises that if LMI countries are the future, crypto will be a significant part of that future.

Rebounding trust in the crypto sector

Reacting to the policies adopted by the India government during the Union Budget in 2022, almost 90 percent people stopped investing money in crypto when the Indian government announced that would impose a flat 30 percent tax on capital gains of crypto. This setback was recorded by Indian crypto exchanges which saw a steep decline in their daily transaction volumes.

To make things worse, 9 months later, the crypto behemoth FTX collapsed in Nov 2022. After back to back setbacks, trust in the crypto sector declined in high-income nations, slowing down day-to-day crypto payments. However, the report remains optimistic about the future of the digital assets sector.

Promising institutional adoption

Institutional adoption, driven mainly by organisations in high-income countries, continues to gain momentum despite the ongoing challenges in the crypto space. This paints a positive picture of the crypto sector's future.

Other nations embracing crypto

Apart from India, Nigeria, and Thailand, countries like Indonesia, Pakistan, Brazil, China, Turkey, Russia, the UK, Argentina, Mexico, Bangladesh, Japan, Canada, and Morocco are also witnessing regular cryptocurrency adoption, according to the Chainalysis report.