@Chainalysis released an excerpt from its forthcoming yearly Geography of Cryptocurrency report, revealing that Central and South Asia and the broader Oceania region currently dominate in the global ‘grassroots adoption’ index, with six of the top 10 countries located in this region.
India, Nigeria, and Thailand took the top three spots in a fresh ranking of grassroots crypto adoption. Notably, lower-middle-income countries are at the forefront of mass cryptocurrency adoption. It is also worth noting how little a restrictive regulation impacts down-to-up mass adoption in India.
Researchers highlight that worldwide crypto grassroots adoption has declined since the collapse of FTX in 2022. However, lower-middle-income countries, according to the World Bank’s wealth classification, have shown the strongest recovery in grassroots adoption over the past year.
India remains the largest cryptocurrency market in the region and is at the forefront of mass adoption, according to Chainalysis data. It has also become the second-largest crypto market globally in terms of estimated transaction volume, surpassing other major economies.
It is worth noting that India had earlier considered a complete ban on cryptocurrencies. However, during the recent G20 summit, India joined other G20 countries to support the International Monetary Fund (IMF) recommendations on regulating cryptocurrencies.
In line with these IMF recommendations, India is currently developing a regulatory framework for cryptocurrencies, which, if ratified, could be passed into law within the next five to six months.
The five-point crypto regulatory framework includes:
- An advanced Know Your Customer (KYC) system for cryptocurrency businesses, aligning with FATCA and existing anti-money laundering regulations.
- Mandatory real-time proof-of-reserve audits to be furnished by cryptocurrency platforms to regulatory authorities.
- A uniform global taxation system.
- Under the rules of the Reserve Bank of India, crypto exchanges could acquire the status of authorized dealers (like banks).
- Possible requirement for positions like the Money Laundering Reporting Officer (MLRO) for crypto platforms.