India, Nigeria, and Thailand confidently secure their positions as the top three countries in Chainalysis' 2023 Global Crypto Adoption Index. Notably, lower middle-income nations are spearheading the grassroots adoption of cryptocurrencies.
In its annual Index report, the esteemed blockchain analytics firm reveals that the central and south Asian regions, along with the wider Oceania regions, reign supreme at the pinnacle of its index. Impressively, six of the top ten countries hail from this dynamic part of the world.
This index underscores a global trend of declining grassroots cryptocurrency adoption following the FTX upheaval of 2022. However, the standout performers in this context are the lower middle-income countries, as classified by the World Bank. Over the past 12 months, these nations have exhibited the most robust resurgence in grassroots crypto adoption.
Remarkably, lower middle-income countries are the sole category where total grassroots adoption exceeds the levels observed in Q3 2020, just before the most recent bull market.
Chainalysis takes this opportunity to emphasize several promising implications of this data. Notably, countries falling within the lower middle-income category typically boast burgeoning industries and populations, collectively representing over 40% of the global populace.
The implication is clear: If lower middle-income countries are shaping the future, then cryptocurrency is destined to play a pivotal role in that future.
Furthermore, the report indicates that institutional adoption, led by high-income nations, is steadily gaining momentum despite enduring a prolonged bear market. It envisions a potential "bottom-up and top-down" adoption scenario for cryptocurrencies, where these digital assets serve the diverse needs of users from both affluent and developing nations.
India, a frontrunner in the cryptocurrency landscape, retains its status as the largest market in the region and takes the lead in grassroots adoption according to Chainalysis' index. Impressively, it has also ascended to become the second-largest cryptocurrency market globally in terms of raw estimated transaction volume, surpassing other major economies.
Chainalysis highlights India's distinctive tax deducted at source (TDS) scheme for cryptocurrency transactions, wherein a 1% tax is applied to all transactions, deducted from the user's balance at the time of the trade to facilitate its completion. This innovative approach underscores India's unique position in the cryptocurrency ecosystem.