The report shows that India is the leader in crypto adoption for the second year in a row

India led the way in global adoption of cryptocurrencies for the second year in a row as investors grappled with the country’s strict regulatory stance and tough trading tax, a report by blockchain analytics company Chainalysis showed on Wednesday.

The report, which tracks adoption across four sub-categories across 151 countries, shows that India ranks high in adoption of centralized exchanges and decentralized finance assets from June 2023 to July 2024.

India has taken a tough stance against cryptocurrencies since 2018, with the Financial Intelligence Unit (FIU) issuing show-cause notices to nine offshore cryptocurrency exchanges in December 2023 for non-compliance with local regulations.

“Despite the restrictions, crypto has also achieved a fairly broad level of adoption across assets in India, which means that new participants in crypto may be participating through services that are not restricted,” said Eric Jardine, research lead at ChainAlysis.

“Now we’re starting to see some of those restrictions come back, for example, with Binance, which is probably going to expand adoption in the country.”

Binance, the world’s largest crypto exchange, was fined 188.2 million rupees ($2.25 million) in June, a month after registering with the FIU in an attempt to resume operations in the country. Crypto exchange KuCoin registered with the watchdog in March but faced a small fine of Rs 3.45 million.

Seven of the top 20 countries in Channelysis’ Global Adoption Index were Central and South Asian countries such as Indonesia, Vietnam and the Philippines.

The overall decentralized transaction volume conducted in retail-sized transfers, with countries with low purchasing power per capita, recorded $10,000 worth of crypto, the report said.

Trading was strong in Indonesia, which has banned the use of cryptocurrencies as a means of payment, but allows investments in assets. The country recorded an inflow of $157.1 billion in digital assets trading in the 12 months to July, the report said.