India Bucks Downtrend By Topping Chainalysis Adoption Index

India ranks second worldwide by DEX trading volume

By: Samuel Haig Loading...

India Bucks Downtrend By Topping Chainalysis Adoption Index

Indian users bucked the crypto downtrend, with the country topping Chainalysis’s 2023 Geography of Cryptocurrency report.

The annual report was published on Oct. 23 and scores 155 countries based on flows to centralized exchange volume, peer-to-peer (P2P) trading volume, and DeFi transaction volume. Each metric is weighted by purchasing power parity per capita, with P2P volume also weighed by number of internet users.

India topped the rankings by every metric except for P2P volume. Nigeria led by P2P volume and ranked second overall, followed by Vietnam, the United States, and Ukraine.

Without adjusting the data, India also ranked second by DEX volume, fourth by activity on centralized exchanges, lending protocols, and smart contract interactions, and ninth for NFT volume.

India’s strong crypto adoption comes in spite of the nation’s challenging landscape with regard to digital asset regulation and taxation.

In recent years, India’s web3 users have had to navigate a sky-high domestic premium on digital assets, a ban on banks providing services to crypto firms, and, finally, the introduction of a 30% tax on crypto trading profits earlier this year.

Lower middle income countries lead crypto adoption

Chainalysis noted that Lower Middle Income (LMI) countries made up the majority of top-ranked nations according to its adoption index. The World Bank’s LMI classification refers to countries where the gross national income per capita sits between $1,086 and $4,255.

“There’s one crucial segment of countries where grassroots adoption has seen a much stronger recovery than anywhere else: Lower middle income countries,” Chainalysis said. “LMI is the only category of countries whose total grassroots adoption remains above where it was in Q3 2020.”

Chainalysis said growing adoption among LMI nations is a promising sign for crypto’s future, with 40% of the world’s population currently residing in them.

“LMI countries are often countries on the rise, with dynamic, growing industries and populations,” Chainalysis said. “Many of them have undergone significant economic development in the last few decades to rise from the low income group… If LMI countries are the future, then the data indicates that crypto is going to be a big part of that future.”