Indian cryptocurrency exchanges are actively pursuing secure, viable, and permanent payment solutions. This urgency stems from the ongoing struggle with unclear regulations and a hesitant banking sector. Currently, most Indian banks remain reluctant to facilitate crypto transactions, leading to significant operational challenges for exchanges.
According to Avinash Shekhar, Co-CEO of ZebPay, the banking industry's unwillingness to engage has resulted in delayed settlements for exchanges. This situation is pushing platforms to explore alternative payment processing options to ensure smoother and more reliable operations.
Blockchain Adoption in Tax Systems
In a separate development within the region, Hunan Province issued its first blockchain-based electronic tax certificate in Loudi. A taxpayer successfully completed a property transaction declaration and tax payment using the new "Tax Blockchain + Real Estate Transaction" system.
This system integrates data from five departments—Taxation, Natural Resources, Housing and Urban-Rural Development, Public Security, and Civil Affairs—via blockchain technology. It significantly reduces the documentation required from taxpayers and slashes the average processing time from half a day to under five minutes.
Stablecoins and Ethereum Outpace Bitcoin in Transaction Volume
A recent report by blockchain analytics firm Chainalysis reveals intriguing trends in cryptocurrency usage. In Q1 2021, the top four cryptocurrencies by transaction volume were:
- Stablecoins: $869 billion
- Ethereum (ETH): $840 billion
- Wrapped Ethereum (wETH): $635 billion
- Bitcoin (BTC): $623 billion
The study also categorized wallet holdings by user type. It found that 73% of Bitcoin is held by long-term investors, compared to 58% for Ethereum and 43% for Tether (USDT) on the ERC-20 standard. Only 7% of Bitcoin is held by traders, who typically seek short-term gains, whereas 18% of Ethereum and 14% of ERC-20 USDT are trader-held.
Chainalysis drew three key conclusions:
- Bitcoin is primarily used for long-term investment.
- Ethereum is transacted more frequently and mainly powers new DeFi platforms.
- Stablecoins like Tether are the most traded crypto assets, used chiefly for trading settlement and storing funds on exchanges between trades.
Ukraine’s New Law Equates CBDC to Cash
Ukraine’s parliament recently passed a new payment services law that formally recognizes a future central bank digital currency (CBDC). The electronic hryvnia, though not yet launched, is legally equated with cash, bank accounts, and electronic payments. The law stipulates that the CBDC will be an electronic form of the national currency, issued and managed by the National Bank of Ukraine.
Bitcoin Active Addresses Hit Multi-Year Low
Data from Glassnode indicates a significant drop in Bitcoin network activity. The seven-day moving average of active addresses fell to 758,165, the lowest since April 2020. This decline suggests weakening demand and reduced user engagement.
Charlie Morris, CIO of ByteTree Asset Management, noted that the decline in active users indicates that the hype cycle has ended. The market is no longer attracting new entrants at the previous rate. Additionally, the seven-day average of daily transactions dropped below 300,000 for the first time since March 2020.
U.S. Ranked Most Crypto-Ready Nation
Research firm CryptoHead’s 2021 Crypto Readiness Index ranked the U.S. as the most prepared country for cryptocurrency adoption, with a score of 7.13 out of 10. The index evaluated factors like Google search trends, crypto ATM saturation, and legislative friendliness.
The U.S. leads globally with over 17,000 cryptocurrency ATMs. Its laws permit holding and using cryptocurrencies in banking, and crypto-related searches increased by 140% over the past year. Cyprus was ranked as the second most ready jurisdiction.
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Frequently Asked Questions
Why are Indian banks reluctant to work with crypto exchanges?
Indian banks are cautious due to regulatory ambiguity and the lack of clear guidelines from authorities. This hesitation leads to delayed settlements and forces exchanges to seek alternative payment solutions.
What are the main uses of stablecoins like Tether?
Stablecoins are primarily used for trading settlement on exchanges and as a temporary store of value between trades. Their stability makes them ideal for these purposes.
How does blockchain improve tax systems?
Blockchain technology integrates data from multiple departments, reducing paperwork and processing time. It enhances transparency and efficiency in administrative processes like tax collection.
What does the drop in Bitcoin active addresses indicate?
A decline in active addresses suggests reduced network activity and demand. It often signals the end of a hype cycle and a slowdown in new user adoption.
Why is the U.S. considered the most crypto-ready country?
The U.S. scores high due to its large number of crypto ATMs, favorable regulations, and significant public interest, as shown by search trends and adoption rates.
How does Ukraine’s new law treat CBDCs?
The law equates a future digital hryvnia to cash, bank accounts, and electronic payments, granting it the same legal status and ensuring it is regulated by the National Bank of Ukraine.