India’s cryptocurrency landscape is undergoing a significant transformation. Despite regulatory uncertainty and high taxation, young traders from across the country are increasingly turning to digital assets as an alternative investment avenue.
India’s Booming Crypto Usage
Reuters reported, that in India’s smaller cities, a new wave of cryptocurrency traders is emerging. Flower shop owner Ashish Nagose from Nagpur, like thousands of others, has been attending crypto trading classes every weekday for the past two months.
Previously involved in stock options trading, Nagose is now exploring digital assets as Indian regulators tighten rules on equity derivatives. He believes investing in cryptocurrencies will provide financial security for his family’s business during economic downturns.
Crypto Market Set to Surge From $2.5B In 2023 To $15B By 2035
With India’s job market struggling to keep pace with economic growth, many young Indians are looking for alternative sources of income. In a country where two-thirds of its 1.4 billion people are under 35, cryptocurrency offers a new financial opportunity.
According to Kush Wadhwa, a partner at Grant Thornton Bharat, India’s crypto market is expected to grow from $2.5 billion in 2023 to over $15 billion by 2035, reflecting a compound annual growth rate (CAGR) of 18.5%.
Crypto Adoption Rising in Small Cities
While major metropolitan areas like Mumbai and Delhi have long dominated financial markets, the rise of crypto adoption in smaller cities is changing the landscape.
Data from CoinSwitch, one of India’s largest crypto platforms, shows that seven out of the top ten cities driving crypto activity in 2024 were non-metro locations like Jaipur, Lucknow, and Pune.
“Growth is now being driven by non-metro cities. That’s true for the stock world, and it’s true for crypto,” said Balaji Srihari, Vice President at CoinSwitch, which has a user base of 20 million.
The ease of mobile trading apps and online learning resources has enabled more young Indians to enter the crypto space, despite government efforts to discourage it through high taxation and regulatory warnings.
Mechanical engineer Sagar Neware, 25, is among those turning to crypto to improve his financial future. His father’s plastic packaging business shut down years ago, and Neware now dreams of reviving it with earnings from crypto trading.
Despite working a full-time job at the local transport office, he spends his nights studying market trends and trading digital assets, stated the report.
The Quest for Regulatory Clarity in India
Despite growing adoption, India’s regulatory stance on cryptocurrencies remains unclear. Unlike most G20 nations, India has neither introduced clear rules for crypto trading nor brought it under existing financial regulations.
The Reserve Bank of India (RBI) has consistently warned against crypto risks, while the Finance Ministry continues to deliberate on oversight mechanisms.
Currently, crypto investors in India face a 30% tax on gains—one of the highest in the world—along with 1% TDS on every transaction, which has dampened enthusiasm among institutional traders.
However, there is no outright ban on crypto, leading to widespread speculation about the government’s next move. In its December 2024 Financial Stability Report, the RBI reiterated concerns that “widespread usage of crypto assets and stablecoins has consequences for macroeconomic and financial stability.”
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Global Crypto Giants Eyeing an Indian Comeback
Despite regulatory uncertainty, global exchanges are keen to re-establish their presence in India. Coinbase, one of the world’s largest crypto trading platforms, is actively working on a return after suspending operations more than a year ago due to compliance challenges.
Meanwhile, Michael Saylor has expressed optimism about India’s Jetking adopting the Bitcoin Standard. This move highlights a growing trend where Indian firms are beginning to recognize Bitcoin as an asset reserve, following in the footsteps of international corporations.
Crypto’s Future in India: A Balancing Act
As India navigates its stance on digital assets, traders like Nagose and Neware continue to explore opportunities in the crypto market. While the lack of regulation poses risks, it also fuels speculation and interest in digital assets.
The next few years will be crucial in determining whether India embraces crypto with structured regulations or imposes stricter controls.
For now, young Indians in smaller cities are shaping the country’s crypto revolution, proving that digital finance is no longer limited to traditional financial hubs. Whether the government embraces or restricts this shift remains to be seen.
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