India: the world's number-one adopter and largest remittance market, taxed into the grey zone
India is the largest prize and the most frustrating puzzle in this series. It is the number-one country in the world for digital-asset adoption. It is the largest recipient of remittances on earth. And it has chosen a policy that is neither a ban nor a framework, but something in between — heavy taxation without clear regulation — which has had the unintended effect of pushing enormous volumes of USDT activity into peer-to-peer and offshore channels.
Let me correct a common misconception first, because it matters: digital assets are not illegal in India. The reality is more complicated, and more interesting, than that.
Orientation: the scale is staggering
The numbers in India operate on a different order of magnitude from anywhere else in this series. India ranks first in the world for grassroots digital-asset adoption, leading across every category from retail to institutional flows. It processed roughly $2.36 trillion in digital-asset transactions between mid-2024 and mid-2025 — a 69 percent increase year on year — with an estimated 119 million users. No other country comes close on raw participation.
On top of that, India is the largest remittance market in the world, receiving well over $100 billion a year from its vast global diaspora. Stablecoins like USDT offer faster, cheaper transfers than the traditional remittance channels those flows currently use. The demand-side conditions for cross-border stablecoin settlement are, on paper, the best on the planet.
The policy: taxed, not banned
Here is where India diverges from the simple "legal or illegal" framing. India has not banned digital assets. Instead, it taxes them — heavily.
Since 2022, India has imposed a flat 30 percent tax on gains from what it calls Virtual Digital Assets, with no ability to offset losses, plus a 1 percent tax deducted at source on transactions. Stablecoins such as USDT and USDC are treated as virtual digital assets under these rules. This regime was reaffirmed for 2026–27. Crucially, this is a tax framework, not a regulatory one: India taxes the activity without providing the clear licensing, consumer-protection, and operating framework that a country like Indonesia has built.
The effect has been predictable. The punitive tax — particularly the 1 percent deduction on every transaction, which crushes active trading — has driven a large share of Indian activity off domestic, compliant platforms and onto offshore exchanges and peer-to-peer channels, where the same USDT trades happen with less friction. India did not eliminate the activity. It relocated it to where it has the least visibility and control.
The grey zone, and the opportunity in it
So India sits in a peculiar grey zone: the world's largest adopter and largest remittance market, with massive USDT usage, but governed by a tax regime that has pushed much of that usage into offshore and peer-to-peer settlement rather than regulated domestic rails. There is no comprehensive licensing framework of the kind emerging elsewhere, and registered entities operate under anti-money-laundering reporting rules rather than a full market structure.
For a regulated treasury-infrastructure business, this is both an enormous opportunity and a real puzzle. The opportunity is obvious: the demand is the largest in the world, the remittance corridors are vast, and the current policy has left huge volumes flowing through channels with poor compliance and oversight. The puzzle is timing and structure: until India moves from a purely tax-driven approach to a genuine regulatory framework — which would let compliant, licensed infrastructure compete properly against the offshore and peer-to-peer market — the regulated opportunity remains constrained by the very policy that created the grey zone.
What it means for treasury infrastructure
India is the clearest example in this series of a market where policy, not demand, is the binding constraint. The demand could not be stronger. What is missing is a framework that rewards doing this in the open. The 30 percent tax and 1 percent deduction were designed to discourage speculation, but their side effect has been to disadvantage exactly the regulated, compliant operators who would otherwise bring these flows into a supervised structure.
The constructive path for India — and the one that would unlock a genuinely vast cross-border settlement market — is a shift toward proper regulation alongside its taxation: licensing, clear rules for stablecoin settlement, and a level playing field for compliant operators. Whether and when India takes that step is the single most important variable for the world's largest digital-asset market.
My read
India demands patience and realism in equal measure. It is too large and too central to ignore — the world's number-one adopter and largest remittance market cannot be left off any serious map of this industry. But its current policy actively works against the regulated model, and no amount of demand changes that until the framework does.
So I hold India as the great latent opportunity of this series: the biggest demand pool on earth, currently routed away from regulated rails by a tax-first policy, waiting for the regulatory clarity that would let compliant infrastructure serve it properly. When that clarity comes — and the global trend, from the United States to Pakistan, suggests the pressure for it will only grow — India becomes the largest single market this thesis describes. Until then, it is the one to understand most deeply and approach most patiently.