India has emerged as the region’s biggest centralized crypto exchange market despite a broader decline in its crypto economy.
Between July 2025 and June 2026, Indian users received $88.4 billion through centralized crypto exchanges (CEXs), according to Chainalysis. This was higher than Singapore’s $82.3 billion, Australia’s $79.3 billion and Vietnam’s $69.8 billion.
India’s overall crypto activity reached $135 billion during the period, making it the third-largest crypto economy in Central and Southeast Asia and Oceania (CSAO), behind Singapore and Australia. However, the country’s crypto economy declined 14.7% during the global bear market.
The figures show that while India experienced a contraction in overall crypto activity, centralized exchanges continued to play a major role in how Indian users accessed and traded digital assets.
Indian Investors Move Toward Long-Term Crypto Holdings
Crypto use in India continues to be largely connected to investment rather than everyday payments. CoinSwitch co-founder Ashish Singhal told Chainalysis that crypto in India is “predominantly being used as an investable asset,” with users mainly buying, holding and selling digital assets.
The investor base is also changing. According to Singhal, people aged 35 and above are increasingly entering the market, including investors with larger portfolios. This suggests that crypto ownership is expanding beyond the younger audience traditionally associated with digital assets.
Mudrex CEO Edul Patel described a similar change in behavior. He said the mindset among many investors was shifting from “flip” to “accumulate.” Crypto is increasingly being viewed alongside traditional investments such as equities, gold and mutual funds as a way to diversify portfolios.
Domestic Exchanges Lose Ground to Offshore Platforms
Despite India’s strong CEX activity, domestic exchanges account for only a small share of the country’s trading volume.
Chainalysis estimates that Indian platforms represented around 7% of exchange volume before their share dropped in mid-2022. In the latest data, domestic platforms accounted for just 0.7%.
This is significantly below the roughly 7% average share recorded across other CSAO markets.
Industry participants have linked the decline partly to India’s crypto tax structure. Since 2022, qualifying virtual digital asset transactions have been subject to a 1% tax deducted at source. Compliant domestic exchanges collect the tax, while offshore platforms may not.
Indian authorities have responded by increasing oversight of offshore platforms. Virtual digital asset providers serving Indian customers must register with FIU-IND and comply with anti-money-laundering requirements, regardless of whether they maintain a physical presence in India.
Crypto Oversight and Tax Reporting Continue to Expand
India is also widening its scrutiny of crypto transactions beyond traditional exchange activity. FIU-IND has sought information on large over-the-counter trades, including transactions worth more than $10,000, while exchanges face requirements covering customer identification, transaction records and suspicious transaction reporting.
KYC requirements have also become stricter, with measures including live selfie verification, geolocation capture, and bank account checks.
Platforms must retain customer identity and transaction records for at least five years, with higher-risk customers facing enhanced due diligence.
At the same time, India has expanded parts of its international tax reporting framework to cover specified crypto assets and other digital financial products.
With no comprehensive digital asset law yet in place, India’s crypto sector continues to operate under a combination of taxation, anti-money-laundering rules and financial reporting requirements.
