GS Paper - 3 (Science and Technology)

India has been ranked second in terms of crypto adoption, amid a bull run in cryptocurrency assets globally this year, a new report by blockchain data platform Chainalysis showed. According to the report, which ranked 154 countries, worldwide crypto adoption grew by over 881% in the last year. Global adoption has grown by over 2,300% since the third quarter of 2019. Emerging markets led ahead of the United States and European nations, driven by peer-to-peer (P2P) platform trading, the report revealed.

What the report said

  1. India was second only to Vietnam in the study that ranked countries according to the total cryptocurrency received, the amount of cryptocurrency moved in transactions under $10,000, and P2P trade volume, all weighted by purchasing power parity (PPP) per capita.
  2. India’s crypto bull market was triggered in March 2020 by a Supreme Court ruling that set aside the Reserve Bank of India's April 2018 directive banning banks and finance companies from dealing in virtual currencies.
  3. Following the ruling, the country’s top exchanges doubled down on advertising and educating users about the asset class, which has become popular among investors under the age of 25. It is slowly catching the fancy of those aged over 45 as well.
  4. Top crypto exchanges and platforms in India have been operating with limited banking access.
  5. The industry is now eagerly waiting for the proposed cryptocurrency bill, which the finance minister Nirmala Sitharaman said has been tabled before the Cabinet and awaiting its approval.
  6. User sign-ups on crypto exchanges like WazirX have jumped 4937% since March 2020, whereas India’s first crypto unicorn CoinDCX’s user base has grown by almost 700% in the same period.
  7. The fall in global adoption in mature markets such as the United States (8th rank) and China (13th) has been attributed to declining P2P trade volumes weighted for the internet-using population.