Executive Summary

1. Executive Summary

India solidified its position as a global leader in grassroots cryptocurrency adoption in 2024, ranking first worldwide according to Chainalysis's Global Crypto Adoption Index for the second consecutive year. This highlights significant engagement, particularly through centralized services and growing DeFi activity, despite a complex regulatory landscape. The market, valued at approximately $2.5 billion in 2024, saw substantial trading volume growth, driven notably by retail investors in non-metropolitan areas seeking alternative investment avenues and income supplementation. Projections suggest considerable future expansion, potentially exceeding $15 billion by 2035.

The regulatory environment remains a defining characteristic, operating in a "grey area" where Virtual Digital Assets (VDAs) are taxed heavily (30% on gains, 1% TDS) but lack full legal recognition or status as payment instruments. While the Reserve Bank of India (RBI) maintains a cautious stance citing financial stability concerns, the government is reportedly re-evaluating its position in light of global trends. Stringent Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations under the Prevention of Money Laundering Act (PMLA) are actively enforced.

Key drivers fueling India's crypto market include its large, young, and tech-savvy population, the perception of crypto as a long-term investment and potential inflation hedge, the accessibility of trading platforms compared to traditional markets, and the potential for cheaper remittances. However, significant challenges persist, primarily stemming from the ongoing regulatory uncertainty and the impact of the stringent tax regime, alongside prevalent security risks such as scams and fraud. The future outlook points towards increased regulatory clarity, potentially balancing innovation with robust investor protection and financial stability measures, heavily influenced by global regulatory developments.

Market Overview

2. Market Overview: India's Leading Role in Global Crypto Adoption

India has emerged as a significant global player in the cryptocurrency market, demonstrating remarkable resilience and growth despite a complex regulatory environment. As of 2024, India leads the world in grassroots cryptocurrency adoption, securing the top position in Chainalysis's Global Crypto Adoption Index for the second consecutive year [Chainalysis, 2024]. This index, which measures on-chain value received across centralized and decentralized platforms, weighted by purchasing power parity (PPP) adjusted GDP per capita, highlights India's strong performance, particularly in the use of centralized services where it ranks first globally for both total and retail value received. India also shows substantial activity in the Decentralized Finance (DeFi) space, ranking third for total value received and second for retail value received [Chainalysis, 2024]. This leading position is further corroborated by TRM Labs, which identifies India among the top five countries for crypto adoption in 2024, alongside Indonesia, Nigeria, the United States, and Vietnam [TRM Labs, 2024].

The Indian crypto market has witnessed substantial growth in trading activity. Cumulative trading volumes across four of the country's largest exchanges more than doubled quarter-on-quarter, reaching $1.9 billion in the final quarter of 2024 [The Economic Times, 2025, citing CoinGecko]. This surge is largely attributed to increased participation from retail investors, particularly from non-metropolitan areas. According to CoinSwitch, one of India's major crypto platforms boasting 20 million users, seven out of the top ten centers driving crypto activity in 2024 were tier-2 and tier-3 cities such as Jaipur, Lucknow, and Pune [The Economic Times, 2025]. This trend suggests a broadening base for crypto adoption beyond the major urban centers, driven by factors including a young, tech-savvy population (nearly two-thirds of Indians are under 35) seeking alternative investment avenues and ways to supplement income amidst lagging job growth [The Economic Times, 2025].

In terms of market size, the Indian cryptocurrency market was valued at approximately $2.5 billion in 2024. Projections indicate significant future expansion, with consulting firm Grant Thornton Bharat estimating the market could exceed $15 billion by 2035, reflecting a compound annual growth rate (CAGR) of 18.5% [The Economic Times, 2025]. Other estimates, such as those from IMARC Group (cited in search results but not visited), suggest a market size of $2.6 billion in 2024, potentially reaching $13.9 billion by 2033 (CAGR 18.48%). While specific user base numbers vary, the CoinSwitch figure of 20 million users provides a significant benchmark for the scale of participation [The Economic Times, 2025].

Regarding popular cryptocurrencies, Bitcoin (BTC) remains the top trending and most viewed cryptocurrency among Indian users, consistent with its global status [CoinGecko, 2025; The Economic Times, 2025]. Ethereum (ETH) also features prominently. Beyond these established leaders, Indian users show significant interest in a diverse range of altcoins, including Solana (SOL), XRP (Ripple), Shiba Inu (SHIB), and Pepe (PEPE), alongside various newer tokens, reflecting active engagement with broader market trends [CoinGecko, 2025; Outlook Money, 2024 (search result)]. The popularity of meme coins like Shiba Inu and Dogecoin (mentioned in search results) alongside major assets like Bitcoin and Ethereum indicates a dynamic and evolving investment landscape within the country [Outlook Money, 2024 (search result)].

References:

• Chainalysis. (2024). 2024 Global Crypto Adoption Index. Retrieved from https://www.chainalysis.com/blog/2024-global-crypto-adoption-index/
• CoinGecko. (2025, May 4). Trending Cryptocurrencies in India. Retrieved from https://www.coingecko.com/en/highlights/trending-crypto/india
• The Economic Times. (2025, February 25). Crypto trading booms in India's interiors as job growth and incomes disappoint. Retrieved from https://economictimes.indiatimes.com/news/india/crypto-trading-booms-in-indias-interiors-as-job-growth-and-incomes-disappoint/articleshow/118545275.cms
• TRM Labs. (2024, December 6). 2024 Trends: Crypto Adoption and Illicit Exposure by Country. Retrieved from https://www.trmlabs.com/post/2024-trends-crypto-adoption-and-illicit-activity-by-country
• Note: Some references like Outlook Money and IMARC Group were identified in search results but not directly accessed due to browsing limitations or prioritization.

Regulatory Environment

3. Regulatory Environment: Navigating India's Evolving Crypto Landscape

India's regulatory approach towards cryptocurrencies, or Virtual Digital Assets (VDAs) as they are officially termed [ClearTax, 2025], remains complex and dynamic as of early 2025. The country occupies a unique position, characterized by a "grey area" where VDAs are neither explicitly banned nor recognized as legal tender [KYC Hub, 2025]. While trading and investment are permitted, the use of cryptocurrencies for payments is not sanctioned. This evolving stance reflects a balancing act between harnessing technological innovation and mitigating potential risks to financial stability, investor protection, and national security.

Government & RBI Stance: A Cautious Re-evaluation

The Government of India, primarily through the Ministry of Finance, and the Reserve Bank of India (RBI) are the key entities shaping the regulatory environment, alongside the Securities and Exchange Board of India (SEBI) which potentially oversees aspects related to VDA trading [KYC Hub, 2025; Central Banking, 2025]. Historically, the RBI adopted a restrictive approach, issuing a circular in 2018 that barred regulated financial institutions from dealing with crypto entities, a move later overturned by the Supreme Court in March 2020 [KYC Hub, 2025]. Despite this, the RBI continues to express significant reservations. In its December 2024 Financial Stability Report, the central bank reiterated concerns that widespread VDA adoption could undermine monetary policy effectiveness, create fiscal instability, facilitate illicit activities, and circumvent capital controls [Financial Express, 2025; RBI via CoinGeek, 2025]. The RBI views VDAs as a potential threat to monetary sovereignty and financial stability [Central Banking, 2025; Financial Express, 2025].

However, recent statements suggest a potential shift or re-evaluation within the government. In February 2025, Economic Affairs Secretary Ajay Seth indicated that India is reviewing its position on cryptocurrencies, prompted by evolving global attitudes and regulatory developments, particularly in the US [Central Banking, 2025; Reuters via search result]. A government discussion paper on crypto, reportedly delayed since September 2024, is expected to be revisited in light of these international shifts [Central Banking, 2025]. This contrasts with the proposed Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, which aimed to ban most private cryptocurrencies but was never formally introduced, with the government instead prioritizing taxation measures [KYC Hub, 2025]. While SEBI has reportedly shown a more open stance towards regulating crypto trading [Central Banking, 2025], the overall government approach remains cautious, emphasizing control and risk mitigation.

Taxation Policies: A Stringent Framework

In lieu of a comprehensive regulatory bill, India implemented a stringent taxation regime for VDAs through the Union Budget 2022. This framework remains the primary regulatory tool governing crypto activities:

1. Income Tax: A flat 30% tax (plus applicable cess and surcharge) is levied on any income derived from the transfer of VDAs, as defined under Section 115BBH of the Income Tax Act. This rate applies irrespective of whether the gains are classified as capital gains or business income, and it covers activities like selling, trading, swapping, spending, gifting, mining, staking rewards, and airdrops [ClearTax, 2025; KYC Hub, 2025].
2. Deductions: Only the cost of acquiring the VDA is allowed as a deduction when calculating taxable income. No other expenses (e.g., infrastructure costs for mining, transaction fees beyond acquisition) are deductible [ClearTax, 2025].
3. Loss Set-off: Crucially, losses incurred from the transfer of VDAs cannot be set off against any other income, including gains from other VDAs within the same financial year or carried forward to subsequent years [ClearTax, 2025].
4. Tax Deducted at Source (TDS): Section 194S mandates a 1% TDS on the payment made for the transfer of VDAs if the aggregate value exceeds ₹50,000 (or ₹10,000 for specified persons) in a financial year. The responsibility for deduction lies with the buyer, or the exchange if the transaction occurs on an Indian platform. For P2P or foreign exchange transactions, the buyer is responsible for compliance [ClearTax, 2025; KYC Hub, 2025]. There's a potential interpretation that TDS under 194S may not apply when transacting with non-residents [ClearTax, 2025].
5. Gifting: VDAs received as gifts are taxable in the hands of the recipient [ClearTax, 2025].

This tax structure is among the most stringent globally and significantly impacts the profitability and operational dynamics of crypto trading and investment in India.

AML/KYC Compliance

Recognizing the risks associated with illicit activities, VDA-related activities and service providers (exchanges, wallets, etc.) have been brought under the purview of the Prevention of Money Laundering Act (PMLA). This mandates strict compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) norms [KYC Hub, 2025]. India's Financial Intelligence Unit (FIU-IND) actively enforces these regulations, having imposed significant penalties on non-compliant exchanges (e.g., Binance, Bybit) in 2024 and early 2025 and mandating KYC updates [Central Banking, 2025; Coinpedia via search result].

Future Regulatory Outlook (2025-2030)

The future regulatory landscape for cryptocurrencies in India points towards increased clarity and structure, although the exact form remains uncertain. The government's re-evaluation, influenced by global trends and the G20 discussions on a global crypto framework, suggests a move away from outright prohibition towards a more regulated environment [Outlook India, 2025; Central Banking, 2025]. Key expectations for 2025 and beyond include:

• Increased Clarity: A more defined regulatory framework is anticipated, potentially clarifying the legal status of different types of VDAs and establishing clearer rules for market participants [Outlook India, 2025].
• Focus on Balance: Regulations will likely continue to balance promoting innovation with mitigating risks related to financial stability, investor protection, and illicit finance [Outlook India, 2025].
• Potential Tax Refinements: While the core 30% tax rate may remain, refinements to the tax structure, such as clearer definitions for calculating gains/losses or adjustments to TDS rules, might be introduced to improve compliance and reduce ambiguity [Outlook India, 2025].
• Enhanced Compliance: KYC/AML regulations are expected to be further strengthened, potentially with standardized reporting protocols to improve transaction monitoring [Outlook India, 2025; Coinpedia via search result].
• Dedicated Oversight: Discussions around establishing specialized regulatory bodies or task forces specifically for overseeing the VDA market might gain traction [Outlook India, 2025].
• Global Influence: India's regulatory path will remain sensitive to international developments, including the implementation of global standards (like the FSB framework and Crypto-Asset Reporting Framework - CARF) and the approaches taken by major economies [Outlook India, 2025].

While a complete ban seems unlikely given the current trajectory and high adoption rates, the regulatory environment will likely remain stringent, prioritizing control and stability. The development and potential rollout of India's own Central Bank Digital Currency (CBDC), the e-Rupee, will also influence the regulatory narrative surrounding private cryptocurrencies.

References:

• Central Banking. (2025, February 6). India’s government to re-evaluate crypto stance. Retrieved from https://www.centralbanking.com/fintech/crypto-assets/7972247/indias-government-to-re-evaluate-crypto-stance
• ClearTax. (2025, April 21). Taxation On Cryptocurrency: Guide To Crypto Taxes In India 2025. Retrieved from https://cleartax.in/s/cryptocurrency-taxation-guide
• Financial Express. (2025, March 8). RBI must not fall for Trump’s crypto circus. Retrieved from https://www.financialexpress.com/opinion/rbi-must-not-fall-for-trumps-crypto-circus/3771082/
• KYC Hub. (n.d.). Cryptocurrency Regulations in India: A Guide for 2025. Retrieved May 4, 2025, from https://www.kychub.com/blog/cryptocurrency-regulations-in-india/
• Outlook India. (2025, March 11). Crypto Regulations In India: What To Expect In 2025 And Beyond. Retrieved from https://www.outlookindia.com/xhub/blockchain-insights/crypto-regulations-in-india-what-to-expect-in-2025-and-beyond
• Note: References to Reuters, Coinpedia, CoinGeek were identified in search results or cited within other accessed articles but not directly visited due to browsing limitations or prioritization.

Key Market Drivers

4. Key Market Drivers: Fueling India's Crypto Growth

Despite a challenging regulatory and taxation environment, India has emerged as a global leader in cryptocurrency adoption, ranking first in Chainalysis' 2024 Global Crypto Adoption Index [Chainalysis, 2024]. This remarkable growth is propelled by a confluence of demographic, economic, technological, and behavioral factors.

Demographic Dividend & Technology Adoption

A significant driver is India's large, youthful, and increasingly tech-savvy population. With an average age of around 29 and over 100 million crypto owners reported by late 2024, this demographic is naturally inclined towards digital innovation and seeks new investment avenues [YourStory, 2024; Digital Watch, 2024]. High internet and smartphone penetration create fertile ground for digital asset adoption. This generation's comfort with digital platforms, coupled with a higher risk appetite compared to older cohorts, makes them early adopters of cryptocurrencies [YourStory, 2024; PTI News, 2025].

Crypto as an Investment Asset & Portfolio Diversification

There's a noticeable shift in investor perception, with cryptocurrencies, particularly established ones like Bitcoin and Ethereum, increasingly viewed as a legitimate asset class for long-term investment and portfolio diversification, rather than purely speculative instruments [YourStory, 2024]. A 2024 survey by Mudrex indicated that 65% of its users now see crypto as a long-term investment, a significant increase from previous years [YourStory, 2024]. Investors are drawn to the potential for high returns and are strategically allocating a portion of their portfolio (often around 5%) to VDAs, employing strategies like Systematic Investment Plans (SIPs) and buy-and-hold to navigate volatility [YourStory, 2024]. The growing global recognition of Bitcoin as a store of value ('digital gold'), partly fueled by institutional adoption elsewhere, reinforces this trend in India [YourStory, 2024; PTI News, 2025].

Economic Factors: Income Supplementation & Inflation Hedging

Economic pressures also play a role. In non-metro cities particularly, crypto trading has seen significant growth as individuals seek to supplement incomes amid disappointing job growth and wage stagnation [The Economic Times, 2025]. The relative accessibility of crypto platforms compared to traditional markets, especially restricted derivatives, lowers the barrier to entry for retail investors [The Economic Times, 2025].

Furthermore, cryptocurrencies, especially Bitcoin with its fixed supply, are perceived by some investors as a potential hedge against inflation and the depreciation of the Indian Rupee (INR) [PTI News, 2025; TRM Labs, 2024]. Amid economic uncertainty, the appeal of a decentralized asset outside the direct control of central banks increases [PTI News, 2025].

Platform Innovation, Accessibility & Education

The proliferation of user-friendly domestic and international crypto exchanges and platforms has significantly lowered entry barriers. Features like seamless INR conversions, diverse product offerings (including SIPs and automated strategies), and secure wallets make it easier for Indians to participate [Digital Watch, 2024; PTI News, 2025; YourStory, 2024]. Many platforms are also investing heavily in user education through blogs, seminars, and platform insights, aiming to foster informed decision-making and long-term engagement, moving users beyond speculation towards understanding the underlying technology and market dynamics [YourStory, 2024].

Global Trends & Remittances

India's market is also influenced by global trends. Increased institutional adoption worldwide lends legitimacy to the asset class [PTI News, 2025; YourStory, 2024]. Additionally, the potential for cryptocurrencies to offer faster and cheaper cross-border remittances is a relevant driver for a country with a large diaspora, although regulatory hurdles and volatility currently limit widespread use for this purpose [PTI News, 2025; TRM Labs, 2024].

In summary, India's crypto market growth is driven by a young, tech-literate population seeking new investment opportunities, a growing perception of crypto as a long-term asset and inflation hedge, economic pressures encouraging income supplementation, and the increasing accessibility and sophistication of trading platforms, all occurring within a context of rising global acceptance.

References:

• Chainalysis. (2024). The 2024 Geography of Cryptocurrency Report. Retrieved from https://www.chainalysis.com/blog/2024-global-crypto-adoption-index/
• Digital Watch Observatory. (2024, November 29). India leads global crypto adoption despite taxes. Retrieved from https://dig.watch/updates/india-leads-global-crypto-adoption-despite-taxes
• PTI News. (2025, January 25). Bitcoin at ₹1 Crore: What’s Fueling the Surge in India? Retrieved from https://www.ptinews.com/press-release/bitcoin-at-1-crore-what-s-fueling-the-surge-in-india-/2233591
• The Economic Times. (2025, February 25). Crypto trading booms in India's interiors as job growth and incomes disappoint. Retrieved from https://economictimes.indiatimes.com/news/india/crypto-trading-booms-in-indias-interiors-as-job-growth-and-incomes-disappoint/articleshow/118545275.cms
• TRM Labs. (n.d.). 2024 Trends: Crypto Adoption and Illicit Exposure by Country. Retrieved May 4, 2025, from https://www.trmlabs.com/post/2024-trends-crypto-adoption-and-illicit-activity-by-country
• YourStory. (2024, November 11). Investing in cryptocurrency: Indian investors are in it for the long haul. Retrieved from https://yourstory.com/2024/11/investing-cryptocurrency-indian-investors-long-haul

Challenges & Risks

5. Challenges and Risks in the Indian Crypto Market

Despite its rapid growth and high adoption rates, the Indian cryptocurrency market operates amidst significant challenges and risks that impact investors, businesses, and the broader financial ecosystem.

Regulatory Uncertainty and Ambiguity

Perhaps the most significant challenge is the persistent regulatory uncertainty. As of early 2025, India lacks a comprehensive legal framework specifically governing cryptocurrencies [Finlaw.in, 2025]. While not explicitly banned (following the Supreme Court overturning the RBI's 2018 banking ban), VDAs are not recognized as legal tender, existing in a regulatory "grey area" [KYC Hub, 2025]. This ambiguity creates confusion for investors regarding the long-term legality and treatment of their assets and hinders businesses (like exchanges and blockchain startups) from making long-term strategic decisions or attracting investment [Finlaw.in, 2025]. Although the government introduced taxation measures (30% gains tax, 1% TDS) in 2022, providing a degree of implicit recognition, the absence of a dedicated regulatory bill (like the proposed but unintroduced 2021 bill) leaves many questions unanswered [KYC Hub, 2025; Finlaw.in, 2025]. Recent signals suggest the government might re-evaluate its stance due to global shifts, but concrete action is pending [Central Banking, 2025]. This uncertainty remains a major deterrent to institutional participation and mainstream integration.

High Taxation Regime

The current taxation structure, while providing some clarity, is perceived as punitive and a significant challenge. The flat 30% tax on all VDA gains (with no deductions beyond acquisition cost and no loss set-off against other income) and the 1% TDS on transactions above certain thresholds are considered high [ClearTax, 2025; KYC Hub, 2025]. Industry observers note that this regime has dampened trading volumes on domestic exchanges, potentially pushing users towards non-compliant offshore platforms or P2P trading to avoid the tax burden, which ironically increases risks related to AML/KYC compliance and investor protection [Finlaw.in, 2025].

Security Risks and Prevalence of Scams

The crypto space globally is susceptible to scams and fraud, and India is no exception. Common types reported include Ponzi schemes, impersonation scams (often via social media), phishing/social engineering attacks, fraudulent investment platforms (fake trading or gaming apps), and identity theft linked to illicit activities like fake loan apps [Times of India, 2022; Finlaw.in, 2025]. High-yield investment scams and "pig butchering" (romance/investment fraud) are noted as globally prevalent [Chainalysis, 2025]. While law enforcement agencies collaborate with exchanges to investigate and freeze illicit assets, the decentralized and often pseudonymous nature of crypto transactions makes recovery difficult [Times of India, 2022]. This necessitates strong security measures by platforms and heightened awareness and due diligence from users.

Banking Restrictions and Friction

Although the Supreme Court struck down the RBI's 2018 ban preventing banks from servicing crypto businesses, challenges persist [KYC Hub, 2025; IMPRI India, 2024]. The RBI remains deeply skeptical of cryptocurrencies, citing risks to financial stability, monetary policy, and potential for illicit use [Financial Express, 2024; RBI Press Releases]. This official caution translates into practical difficulties for the crypto industry. Banks may remain hesitant to offer seamless services (like payment gateway access or stable current accounts) to exchanges, creating operational friction [Implied from RBI stance & KYC Hub, 2025]. This indirectly impacts users, potentially causing delays or issues with fiat deposits and withdrawals, which are crucial on-ramps and off-ramps for the market [KYC Hub, 2025].

Market Volatility

Cryptocurrencies are inherently volatile assets, prone to significant and rapid price fluctuations [Grip Invest, 2024]. This volatility stems from various factors including supply/demand dynamics, market liquidity, investor sentiment (often driven by hype, FUD, or herd mentality), regulatory news, and potential market manipulation [Grip Invest, 2024]. While volatility can present trading opportunities, it poses substantial risks, especially for inexperienced retail investors who may enter the market during peak hype cycles and suffer significant losses during downturns. The RBI and government frequently warn against these volatility risks [Reuters, 2025].

Global Influences

The Indian market is also susceptible to global macroeconomic trends, geopolitical events, and regulatory developments in major jurisdictions like the US or EU, adding another layer of external risk and uncertainty [Finlaw.in, 2025].

Addressing these challenges, particularly through clear and balanced regulation, will be crucial for the sustainable and safe development of India's cryptocurrency ecosystem.

References:

• Central Banking. (2025, February 3). India’s government to re-evaluate crypto stance. Retrieved from https://www.centralbanking.com/fintech/crypto-assets/7972247/indias-government-to-re-evaluate-crypto-stance
• Chainalysis. (2025, January 15). 2025 Crypto Crime Trends from Chainalysis. Retrieved from https://www.chainalysis.com/blog/2025-crypto-crime-report-introduction/
• ClearTax. (n.d.). Taxation On Cryptocurrency: Guide To Crypto Taxes In India 2025. Retrieved May 4, 2025, from https://cleartax.in/s/cryptocurrency-taxation-guide
• Finlaw.in. (2025, March 15). The Future of Cryptocurrency in India: Trends, Regulations, and Market Growth. Retrieved from https://finlaw.in/blog/the-future-of-cryptocurrency-in-india-trends-regulations-and-market-growth
• Financial Express. (2024, December 31). RBI must not fall for Trump’s crypto circus. Retrieved from https://www.financialexpress.com/opinion/rbi-must-not-fall-for-trumps-crypto-circus/3771082/
• Global Legal Insights. (2024, October 25). Blockchain & Cryptocurrency Laws and Regulations | India. Retrieved from https://www.globallegalinsights.com/practice-areas/blockchain-cryptocurrency-laws-and-regulations/india/
• Grip Invest. (2024, April 10). Cryptocurrency Volatility: Impact & Insights. Retrieved from https://www.gripinvest.in/blog/cryptocurrency-volatility-and-its-impact
• IMPRI India. (2024, September 9). The New Age Of Crypto: India's 2024 Regulatory Framework Unveiled. Retrieved from https://www.impriindia.com/insights/crypto-india-regulatory-framework/
• KYC Hub. (n.d.). Cryptocurrency Regulations in India: A Guide for 2025. Retrieved May 4, 2025, from https://www.kychub.com/blog/cryptocurrency-regulations-in-india/
• RBI. (n.d.). Press Releases. Retrieved May 4, 2025, from RBI website (e.g., https://www.rbi.org.in/commonman/English/scripts/PressReleases.aspx?Id=2152)
• Reuters. (2025, February 25). Crypto trading booms in India's smaller cities as job growth... Retrieved from https://www.reuters.com/world/india/crypto-trading-booms-indias-interiors-job-growth-incomes-disappoint-2025-02-25/
• Times of India. (2022, November 28). Decoded: The different types of crypto scams in India. Retrieved from https://timesofindia.indiatimes.com/business/cryptocurrency/bitcoin/decoded-the-different-types-of-crypto-scams-in-india/articleshow/95822637.cms

Glossary

Glossary of Terms

• AML (Anti-Money Laundering): A set of laws, regulations, and procedures intended to prevent criminals from disguising illegally obtained funds as legitimate income.
• Bitcoin (BTC): The first decentralized cryptocurrency, created in 2009, often referred to as digital gold.
• Blockchain: A distributed, immutable ledger technology that underlies cryptocurrencies, recording transactions in blocks linked together chronologically.
• CBDC (Central Bank Digital Currency): A digital form of a country's fiat currency, issued and backed by the central bank (e.g., India's Digital Rupee or e₹).
• Crypto Mining: The process of validating transactions and adding them to a blockchain, typically involving solving complex computational puzzles and being rewarded with new cryptocurrency.
• Cryptocurrency: A digital or virtual currency secured by cryptography, making it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized systems based on blockchain technology.
• DeFi (Decentralized Finance): An emerging financial technology based on secure distributed ledgers similar to those used by cryptocurrencies. It aims to remove intermediaries like banks and brokerages from financial transactions.
• Ethereum (ETH): A decentralized, open-source blockchain platform featuring smart contract functionality, with Ether (ETH) as its native cryptocurrency.
• Fiat Currency: Government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it (e.g., Indian Rupee - INR, US Dollar - USD).
• FIU-IND (Financial Intelligence Unit - India): The central national agency responsible for receiving, processing, analyzing, and disseminating information relating to suspect financial transactions.
• FOMO (Fear Of Missing Out): A psychological driver in investment markets where investors buy assets due to the fear of missing out on potential gains seen by others.
• FUD (Fear, Uncertainty, and Doubt): A strategy to influence perception by disseminating negative, dubious, or false information, often used to drive down prices or discourage adoption.
• KYC (Know Your Customer): A standard due diligence process used by financial institutions and other regulated companies to verify the identity of their clients.
• Legal Tender: Any official medium of payment recognized by law that can be used to extinguish a public or private debt or meet a financial obligation.
• Liquidity: The ease with which an asset, or security, can be converted into ready cash without affecting its market price.
• Market Capitalization (Market Cap): The total market value of a cryptocurrency's circulating supply. It's calculated by multiplying the current market price per coin by the total number of coins in circulation.
• NFT (Non-Fungible Token): A unique digital asset representing ownership of real-world items like art, music, in-game items, and videos. They are bought and sold online, frequently with cryptocurrency.
• PMLA (Prevention of Money Laundering Act): India's primary legislation aimed at preventing money laundering and confiscating property derived from or involved in money laundering.
• Ponzi Scheme: A fraudulent investing scam promising high rates of return with little risk to investors, generating returns for earlier investors with money taken from later investors.
• RBI (Reserve Bank of India): India's central bank and regulatory body responsible for the regulation of the Indian banking system.
• SEBI (Securities and Exchange Board of India): The regulator for the securities and commodity market in India under the ownership of the Ministry of Finance.
• SIP (Systematic Investment Plan): An investment strategy where an investor periodically invests a fixed amount of money into a particular asset, typically mutual funds or, increasingly, cryptocurrencies.
• Smart Contract: Self-executing contracts with the terms of the agreement directly written into code. They run on a blockchain, automatically executing when predetermined conditions are met.
• Stablecoin: A type of cryptocurrency whose value is pegged to another asset class, such as a fiat currency or gold, to maintain a stable price.
• TDS (Tax Deducted at Source): A system under the Indian Income Tax Act where tax is deducted at the point of origin of income.
• VDA (Virtual Digital Asset): The term used in India's Income Tax Act to classify cryptocurrencies, NFTs, and similar digital assets for taxation purposes.
• Volatility: The degree of variation of a trading price series over time, usually measured by the standard deviation of logarithmic returns.
• Web3: The concept of a new iteration of the World Wide Web based on blockchain technology, incorporating concepts like decentralization and token-based economics.

Data Sources

Data Sources

This report synthesizes information from the following sources, accessed on May 4, 2025:

1. Chainalysis. (2024). The 2024 Geography of Cryptocurrency Report. Retrieved from https://www.chainalysis.com/blog/2024-global-crypto-adoption-index/
2. TRM Labs. (n.d.). 2024 Trends: Crypto Adoption and Illicit Exposure by Country. Retrieved from https://www.trmlabs.com/post/2024-trends-crypto-adoption-and-illicit-activity-by-country
3. The Economic Times. (2025, February 25). Crypto trading booms in India's interiors as job growth and incomes disappoint. Retrieved from https://economictimes.indiatimes.com/news/india/crypto-trading-booms-in-indias-interiors-as-job-growth-and-incomes-disappoint/articleshow/118545275.cms
4. CoinGecko. (n.d.). Trending Cryptocurrencies in India. Retrieved May 4, 2025, from https://www.coingecko.com/en/highlights/trending-crypto/india
5. Central Banking. (2025, February 3). India’s government to re-evaluate crypto stance. Retrieved from https://www.centralbanking.com/fintech/crypto-assets/7972247/indias-government-to-re-evaluate-crypto-stance
6. KYC Hub. (n.d.). Cryptocurrency Regulations in India: A Guide for 2025. Retrieved May 4, 2025, from https://www.kychub.com/blog/cryptocurrency-regulations-in-india/
7. ClearTax. (n.d.). Taxation On Cryptocurrency: Guide To Crypto Taxes In India 2025. Retrieved May 4, 2025, from https://cleartax.in/s/cryptocurrency-taxation-guide
8. The Financial Express. (2024, December 31). RBI must not fall for Trump’s crypto circus. Retrieved from https://www.financialexpress.com/opinion/rbi-must-not-fall-for-trumps-crypto-circus/3771082/
9. Outlook India. (n.d.). Crypto Regulations In India: What To Expect In 2025 And Beyond. Retrieved May 4, 2025, from https://www.outlookindia.com/xhub/blockchain-insights/crypto-regulations-in-india-what-to-expect-in-2025-and-beyond
10. Digital Watch Observatory. (2024, November 29). India leads global crypto adoption despite taxes. Retrieved from https://dig.watch/updates/india-leads-global-crypto-adoption-despite-taxes
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