As smaller cities drive grassroots crypto adoption, experts warn of growing scams and demand for stronger policy safeguards
4 July 2025, New Delhi
India’s crypto adoption is seeing a dramatic shift from big-city investors to everyday citizens in Tier-2 and Tier-3 towns. Cities like Patna, Surat, Jaipur, and Coimbatore now contribute to nearly 50% of the nation’s crypto trading volume, with participation from smaller towns growing by over 40% annually. For many, especially small business owners, students, and homemakers, crypto offers a way to bypass limited access to traditional banking and earn supplementary income.
This surge has been driven by increasing mobile internet access, local-language YouTube content, and simplified trading apps. Training centers in cities like Nagpur are recording record enrollment numbers, and India currently ranks #1 globally in grassroots crypto adoption. What’s more, women are joining the movement in larger numbers, especially in states like Uttar Pradesh and Rajasthan, signaling a growing trend of digital financial inclusion.
However, this enthusiasm comes with a darker side—a surge in crypto-related scams, particularly in smaller cities where financial literacy around digital assets is low. Without access to reliable information, many first-time investors fall prey to fraud via unverified Telegram groups, misleading videos, and fake trading apps.
The list of victims is growing. In Lucknow, police uncovered an ₹80 lakh USDT laundering ring involving youth under 32. In Berhampur, Odisha, fraudsters siphoned over ₹6 crore from a businessman via a fake crypto app. Similar cases have surfaced in Surat, Indore, Jaipur, and Ratlam, revealing how widespread and damaging such frauds can be.
Yet, despite booming adoption, India still lacks a clear regulatory framework for virtual digital assets (VDAs). There are no formal guardrails to protect investors or prosecute fraud effectively. Many fall victim to scams without any legal recourse or proper redressal system in place.
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Experts are urging the government to act fast. They recommend forming an inter-ministerial committee involving the Finance Ministry, MeitY, RBI, and industry stakeholders to draft a well-informed regulatory roadmap. At the same time, tax reforms—including lower TDS rates and loss-offset allowances—are needed to support and formalize the sector.
India’s crypto heartland is full of promise—but without regulation and education, that promise could turn to peril. To truly lead in the Web3 economy, India must protect its most enthusiastic adopters and build a safer, smarter path for the future.
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Young, daring, and always chasing the story.
Hi! I’m Mansi Sharma, 22, a fearless journalist who turns lifestyle, health, and political trends into bold, unforgettable narratives. I don’t just report — I make every story sizzle, spark, and stick.