The capitalization of the cryptocurrency market in India has grown by 641 percent in 12 months, Bloomberg writes, citing a study by the analytical company Chainalysis. The demand for digital currency in this country has turned the region covering central and south Asia and Oceania into one of the fastest growing cryptocurrency markets in the world.
India could become a major center for cryptocurrency-related investments as soon as its government develops clearer regulatory guidelines. Only the Middle East and Europe are ahead of the region in terms of growth rates. In addition to India, the widespread adoption of cryptocurrencies is also observed in other relatively poor countries – Pakistan and Vietnam. The capitalization of the digital currency market in Pakistan has increased sevenfold over the year.
However, India’s leadership in the region was ensured by great activity on decentralized financing platforms — the country’s share in global transactions was 59 percent. In addition, the volume of venture investments related to cryptocurrency has increased in the region. “Large transfers of more than $10 million in cryptocurrency account for 42 percent of transactions sent from addresses in India, compared to 28 percent in Pakistan and 29 percent in Vietnam. These figures suggest that Indian cryptocurrency investors work as part of larger and more complex organizations,” the study says.
In 2020, the Indian authorities were actively engaged in regulating the cryptocurrency market. The government even drafted a bill to completely ban the use of digital money, which nevertheless has not been adopted. However, analysts from Chainalysis believe that recent trends indicate that India will limit itself to the introduction of special taxes.
However, other states are going all the way in the fight against cryptocurrency. In September, the People’s Bank of China (an analogue of the Central Bank) said that services for trading, matching orders (matching applications for the purchase and sale of securities on the stock market), issuing tokens and derivatives (contracts on the future price) for cryptocurrencies are strictly prohibited.