India's local crypto exchanges received just 0.7% of inflows, Chainalysis estimates
In brief
- Indian platforms received an estimated 0.7% of exchange value, down from around 7%, per Chainalysis.
- India-based users sent an estimated $88.4 billion to centralized exchanges in the annual period.
- Brazil-based exchanges rose from 1.5% to 12.5% of inflows, per the Latin America chapter.
- Shares measure attributed received value, not market share, revenue or trading volume.
- India's 1% withholding is an operator explanation, not a measured cause of the shift.
Most Indian flows land offshore
Chainalysis attributed $88.4 billion in centralized-exchange inflows to India-based users during the annual period, which made India the largest such market in CSAO. Very little of that reached local venues. The Indian chapter said domestic platforms' share of exchange value received fell from around 7% to 0.7%, with a sharp decline in mid-2022.
That's a tenfold drop.
Brazil went the other way. Brazil-based exchanges previously received 1.5% of inflows and now get 12.5%, according to the chapter, while Brazil's broader crypto economy recorded $252.5 billion in activity in the year ending June 30 (despite contracting 1.6%).
What the numbers measure (and what they don't)
These shares are Chainalysis estimates of geographically attributed received value. They aren't market share, revenue or trading volume; executed trades, revenue and customer numbers measure other parts of a platform's business. The publications describe earlier activity ending before October, and the chapters didn't give exact dates for the share observations. They also didn't say whether the platform sample stayed unchanged, or detail how the domestic shares were calculated.
Chainalysis's general 2026 methodology assigns pooled service activity to user countries using website traffic, adjusted for income differences with the square root of GDP per capita. Because assignment follows estimated users, activity at an exchange based abroad can count toward India's measured market. The firm acknowledged its removal of VPN and bot traffic is imperfect.
Where tax fits in
India's current section 393 sets 1% withholding on consideration paid to a resident for a virtual digital asset transfer, subject to applicable exemptions. The responsible payer deducts it at the earlier of credit or payment. In an illustrative ₹100,000 sale, the seller receives ₹99,000 before fees, with ₹1,000 withheld toward tax.
Operators have pointed to that withholding when explaining where Indian users trade. It's an explanation, though, not a measured cause, and the report doesn't establish that it drove the domestic/offshore split.
Frequently asked questions
Does the 0.7% figure mean Indian exchanges have 0.7% market share?
No. The percentages describe received value in Chainalysis's exchange analysis. Executed trades, revenue and customer numbers measure other parts of a platform's business, and the chapters didn't detail how the domestic shares were calculated.
How does Chainalysis assign exchange activity to India?
Its general 2026 methodology assigns pooled service activity to user countries using website traffic, adjusted for income with the square root of GDP per capita. Because assignment follows estimated users, activity at exchanges based abroad can count toward India's market. Chainalysis acknowledges its VPN and bot filtering is imperfect.
Did India's 1% crypto withholding cause the shift offshore?
That hasn't been shown. Section 393 sets 1% withholding on consideration paid to a resident for a virtual digital asset transfer, but its role in venue choice is an operator explanation rather than a measured cause of the domestic/offshore split.
