Despite Obstacles, India’s Crypto Users Expected to Hit 156 Million in 2023 – Next Crypto Hub?
Based on crypto users alone, India certainly has the potential to become the next crypto hub. Several of the biggest crypto firms, such as Polygon and Algorand, have already started targeting Indian markets. Asia in general is also heating up in terms of crypto developments.
Cryptocurrencies have generated significant skepticism in several countries around the world, including India. In 2018, the RBI prohibited banks from dealing with companies or individuals involved in the trading of digital assets. While the Supreme Court eventually overturned that decision, digital assets were subsequently hit with a 30% tax. This is the highest in the country and on par with gambling earnings.
However, despite these hurdles, the adoption of crypto in the country has seen a steady increase over the past couple of years. A recent study by Statista indicates that India is on track to reach 156 million crypto users by the end of 2023. As a result, India could account for more than half of crypto users in the world. world by the end of the year. Could this mean the country is becoming the next crypto hub? Follow us to find out.
What does the study say?
The report states that crypto users grew by 760% between 2017 and 2022, reaching 134 million users at the end of last year. This spike could be attributed to the COVID-19 pandemic, India’s huge smartphone user base, the country’s drive to become a cashless economy, and the rise of FinTech in the country. The report also goes on to say that if this trend continues, more than 11% of India’s population, or 156 million people, will start using cryptocurrencies by the end of 2023.
According to Statista’s findings, India will adopt cryptocurrencies much faster than the US, UK, Japan, and Russia. Furthermore, the cryptocurrency industry in India could generate profits of around $3.3 billion this year, and profits could more than double to nearly $6 billion by 2027.
The report also sheds light on the demographics and distribution of crypto users in the country. The results show that residents of Delhi and Bengaluru are the most likely to buy and hold digital currencies for the long term. The majority of those who are expected to join and gain a foothold in crypto are young, educated people from a middle-class social structure.
Could India become the next crypto hub?
Based on crypto users alone, India certainly has the potential to become the next crypto hub. Several of the biggest crypto firms, such as Polygon and Algorand, have already started targeting Indian markets. Asia in general is also heating up in terms of crypto developments. For example, last month Hong Kong opened its doors to crypto businesses. Chinese banks have been quick to take notice, providing financial support to crypto firms flocking to the special administrative region.
In addition, we also have the lack of capital gains of Singapore and the tax haven of Dubai. When you combine all of these factors, Asia suddenly appears like an oasis from the regulatory backlash and banking troubles in Europe and the US. And with crypto users expected to reach 156 million by the end of 2023, web3 companies will have their eye on India.
Future regulatory concerns linger
There is another flip side to the coin. The digital asset industry in India has already faced significant regulatory hurdles over the past couple of years. More recently, crypto exchanges were banned from using UPI, which is fast becoming one of the most popular ways to send and receive money in India.
This was a blow to platforms like WazirX, CoinDCX, ZebPay, etc., all of which saw a massive drop in trading volume. And as crypto users continue to grow, the possibility of further regulatory restrictions has also increased. As India hosts the G20 summit this year, the Honorable Minister of Finance, Nirmala Sitharaman, has made crypto regulation one of the pillars of this year’s talks. Therefore, unlike Hong Kong, Singapore, or Dubai, India can come across as a speculative region for crypto businesses.
Furthermore, $22.7 billion in crypto transactions are still expected to originate from the United States in 2023. This is more than half of the $43 billion in global transactions that cryptocurrencies are expected to account for in 2023. India , despite being on track to have nearly 5X the number of crypto users than the US, is only expected to account for $3.3 billion in global transaction value in 2023. such, with significant risk and little reward, crypto businesses may be hesitant to enter the region, and India’s dreams of becoming a crypto hub seem a little distant.
The growth of crypto users in India is a good sign. This shows that Indians see the value in cryptocurrencies and continue to put their money behind these digital assets. This could encourage the government to relax the standards in the future. However, how things unfold, only time will tell.
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