Small towns and cities across India are emerging as vibrant centers for cryptocurrency trading and investment, despite the government’s stringent taxation policies. According to recent media reports, Tier 2 and Tier 3 cities are witnessing a surge in crypto enthusiasts, reflecting a growing acceptance of digital currencies in a country that has historically approached the sector with caution.
A report by The Times of India highlights the rising crypto activity in towns like Botad, Barbaka, Jalandhar, Patna, and Guwahati. These areas are seeing a wave of young investors keen to experiment with Bitcoin and meme coins during the ongoing market bull run. However, the enthusiasm comes despite India’s heavy tax burden on cryptocurrency transactions—30% on capital gains and an additional 1% TDS (tax deducted at source) on transactions exceeding ₹50,000 annually.
Interestingly, meme coins have captured significant attention among local investors, comprising 13% of the country’s total crypto investments. Dogecoin tops the list of most invested cryptocurrencies, while Shiba Inu (SHIB) leads as the most traded token. Investors under 35 years old dominate the demographic, showcasing the appeal of digital assets among younger Indians.
India’s approach to cryptocurrency regulation has evolved significantly in recent years. The government introduced a tax framework in 2022 to curb speculative trading and brought cryptocurrency transactions under the Prevention of Money Laundering Act (PMLA) in March 2023. In 2024, the Securities and Exchange Board of India (SEBI) proposed a multi-regulator framework for overseeing crypto activities.
While cryptocurrencies like Bitcoin and Ethereum are legal in India, they are not recognized as legal tender, and the country lacks a comprehensive regulatory framework for trading and holding digital assets. Despite these limitations, the sector’s allure remains strong, with debates ongoing among policymakers to address risks and concerns associated with the crypto ecosystem.
India’s youth, undeterred by high taxes and regulatory ambiguities, continues to drive the nation’s crypto revolution, turning small towns into unlikely hubs of digital innovation.
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