India has secured the second spot globally in terms of cryptocurrency transaction volume, as revealed in a recent report by Chainalysis. Despite facing challenges related to tax laws, India has emerged as a significant player in the crypto market, surpassing the UK, Turkey, and Russia.

According to Chainalysis, India has showcased remarkable grassroots adoption, with total transaction volumes reaching nearly $269 billion from July 2022 to June 2023. What’s noteworthy is that India’s rise as a prominent cryptocurrency market has occurred despite a regulatory and tax environment that poses difficulties for the industry.

It’s worth noting that India imposes higher tax rates on cryptocurrencies compared to most countries, with a 30% tax on gains and a 1% tax on all transactions. The uneven application of this transaction tax may pose challenges for local crypto exchanges in terms of competitiveness.

However, despite these challenges, Chainalysis emphasizes that India continues to exhibit substantial demand for cryptocurrency. As long as this demand persists, cryptocurrency will maintain its presence in the world’s second-largest country.

It’s essential to highlight that the United States remains the largest global cryptocurrency market, according to the report.

From a regional perspective, Central & Southern Asia and Oceania collectively contribute to 20% of the global cryptocurrency market, making this region one of the most dynamic and intriguing cryptocurrency markets worldwide.

Chainalysis also points out specific factors driving cryptocurrency adoption in different countries within the region. In the Philippines, the popularity of the play-to-earn game Axie Infinity has played a significant role, while in Pakistan, the necessity for wealth preservation amid high inflation and currency devaluation has led many Pakistanis to turn to cryptocurrencies.