The adoption of cryptos in India is growing strongly in 2020.
In particular, some data suggest that it could go so far as to snatch from China the scepter of the Asian country with the largest volume of trade.
This is revealed by a report by Arcane Research that analysed in particular the exchange volumes of bitcoins on P2P platforms such as LocalBitcoins and Paxful.
Limited to the Asia-Pacific area, India and China are currently on the same level, both accounting for 33% of total P2P trading volume. All other Asian countries combined barely reach 34%.
These include the Philippines and Thailand, both with average weekly volumes in excess of $800,000, with the Philippines experiencing strong growth, with weekly volumes at the beginning of the year at just $50,000, and the main national exchange reaching 10 million users.
But India is the real protagonist, given that until last year China dominated these rankings unchallenged.
The growth occurred particularly on Paxful, where the weekly volume increased from less than 80 million rupees at the end of 2019 to over 200 million in September, while from July onwards it has always been over 150 million.
At this point it is fair to imagine that an overtaking could occur in the near future, given that volumes in China do not seem to be significantly higher than in the past.
Among other things, the ban on exchanging fiat money in cryptocurrency in China has favoured P2P platforms without intermediaries, whereas in India this ban no longer exists, so in theory P2P platforms should not be particularly favoured.
Moreover, in China, for example, Paxful has become the leader in this market since LocalBitcoins introduced the mandatory KYC for all, and in fact Paxful dominates the Asian P2P trading market, with a total weekly volume of over $5 million, compared to $4 million for LocalBitcoins.
Looking only at the figures for the second half of 2020, India has already overtaken China from this point of view, precisely because there has not been the powerful growth in China that there has been in India since July.
Therefore, in reality there has already been an overtaking in the short term, while as far as annual volumes are concerned, it will presumably have to wait a little longer.
Why has crypto adoption increased in India in 2020?
The report also identifies some possible reasons behind this Indian boom.
First, the removal of the ban by the Supreme Court in March: after the abolition of banking restrictions, the weekly P2P volume increased by 87%.
In addition, there is a strong distrust of the traditional financial system in India, due to very unpopular decisions such as the withdrawal of high-value banknotes in 2016.
The Indian rupee has been underperforming against the US dollar for years and is now worth 10% less than it was before 2016.
Finally, there is the issue of remittances. In fact, according to the World Bank, India is the main country in the world receiving remittances, so much so that in 2019 they amounted to 83 billion dollars, as much as 2.9% of the national GDP.
These remittances may have lower costs and limitations if cryptocurrency is used, and given that due to the pandemic it is estimated that they will be reduced by 23%, it is possible that several Indians have thought of converting some of their savings into bitcoins.
As trade volumes generally increase as the price of BTC rises, if there is further growth next year, then India’s final overtaking of China can be expected in terms of P2P crypto trade volume.