India is the second most populous country in the world with 1.5 billion people, but it is also home to the largest number of crypto users in the world. According to the latest studies, India has no less than 156 million crypto users, which is more than half of the world's crypto users in 2023. And the numbers are only increasing, as experts estimate that by 2027, there will be no less than 191 million people using crypto in the country.
This growing adoption of new financial technologies can be partly explained by the rise of national FinTech and mobile telephony, as well as a young, increasingly educated population with rising purchasing power. Many local FinTechs are developing new tools to facilitate peer-to-peer payments, cross-border transactions, and micropayments using blockchain.
However, despite this massive adoption of crypto, Indian authorities have historically been hostile to Bitcoin & Co. For months, the government of Narendra Modi has not missed an opportunity to speak out against decentralized cryptocurrencies in favor of their own central bank digital currency. The governor of the central bank, Shaktikanta Das, has even called for a complete ban on private cryptos to prevent the country from the next financial crisis.
However, last week, the entire crypto sector in India must now comply with anti-money laundering (AML) rules. This involves registering with the financial intelligence unit and complying with various mandatory processes such as systematic KYC for users. Professionals in the country are divided on the scope of these measures. For some, it will facilitate adoption through a clearer and more secure regulatory framework for the public by eliminating bad actors from the market. For others, it is a scandalous burden on decentralized cryptocurrencies that will result in an exodus of customers to unregulated international platforms.
In the end, while India is currently the global leader in crypto use, it is difficult to say whether the country will become the future global leader in the sector. The authorities in place have clearly expressed their opposition to decentralized cryptocurrencies, but the growing adoption of financial technologies by the Indian population shows no signs of slowing down. It remains to be seen what impact the new rules will have on the use of crypto in India.
