Why Global Crypto Platforms Are Crushing Indian Exchanges: The Local Struggle Revealed

Indian crypto exchanges are bleeding users while global giants feast on their market share. The local advantage has evaporated—and the reasons cut deep into regulation, trust, and pure financial muscle.

Regulatory Whiplash vs. Global Stability

Local platforms navigate a maze of shifting domestic rules. One month it's a proposed ban, the next a heavy tax. This uncertainty drives users toward established global exchanges operating under clearer, if distant, frameworks like Japan's FSA or Malta's VFA regime. Why bet on a home team that doesn't know if the game is allowed?

The Liquidity Trap

Global platforms offer a simple, brutal advantage: deeper order books and tighter spreads. Traders follow the money, not patriotism. When a local exchange can't match the instant execution for a large Bitcoin order, capital flows to where it's treated best—usually offshore.

Trust Deficit

High-profile collapses and withdrawal halts at some local venues have scarred the community. Meanwhile, global brands tout billion-dollar insurance funds and proof-of-reserves audits. In crypto, trust is the ultimate currency, and many local players are bankrupt.

Product Gap

While local exchanges fight for basic rupee trading pairs, global platforms offer staking, derivatives, NFT marketplaces, and a universe of altcoins. For the modern crypto user, an exchange is a financial ecosystem, not just a fiat on-ramp. The local offerings feel a generation behind.

The cynical finance jab? It's the oldest story in the book: capital goes where it's welcomed and stays where it's coddled. Indian regulators seem to have mastered the art of neither, creating a vacuum that global sharks are all too happy to fill. The fall isn't an accident—it's a textbook case of how to lose an economic revolution.

The wild west of local exchanges

The Indian exchange ecosystem has faced several challenges, ranging from regulatory burdens to security concerns. Gopal asked Singhal about the struggles domestic exchanges face.

“WazirX was an older player in India. Early crypto adopters losing their trust is equivalent to India losing its footing in the crypto ecosystem,” Singhal said. To address this, CoinSwitch launched the KS program, dedicating ₹600 crore to help victims of the WazirX hack rebuild their portfolios. 

“A lot of users have actually signed up for that and are gaining a lot of money through that program already,” he added.

Singhal emphasized that regaining trust is critical not just for one exchange but for the entire ecosystem. “If these users can recover their losses in one way or the other, they can regain trust and participate in the crypto ecosystem again. Their commitment and enthusiasm should not be lost because of mistakes by someone else,” he told Gopal.

Global exchanges vs Indian exchanges: Volume, users, and market dominance

Gopal asked why international exchanges such as Binance and Coinbase continue to dominate the Indian market despite strong local players.

Singhal attributed this largely to regulatory arbitrage. “Indian exchanges have to follow TDS and taxation rules, while many international exchanges are not fully bound by the same regulations. This gives users a reason to migrate offshore,” he explained.

However, Singhal clarified that he does not view global platforms as a threat. “We don’t mind having Binance, Coinbase, and others operating in India because more choices for the user actually helps them. Ultimately, the user ends up winning. It is not about competition; it is about providing better products and services while adhering to regulations.”

What is stopping users from trusting Indian exchanges?

Gopal asked what factors prevent Indian users from fully trusting domestic exchanges.

Singhal listed several reasons:

• Regulatory Complexity: “High TDS and the inability to offset losses discourage active trading.”
• Security Concerns: “Hacks like WazirX hurt user confidence.”
• Global Alternatives: “International platforms provide better liquidity, user experience, and flexibility.”

He noted that addressing these challenges requires a mix of user-centric initiatives and regulatory clarity. “If users can recover their losses and regain trust, they can re-engage with domestic exchanges. Programs like CoinSwitch KS are critical for rebuilding confidence,” he said.

The impact of the WazirX hack

Gopal asked Singhal about the long-term impact of the WazirX hack on Indian crypto adoption.

“The WazirX hack was a turning point. Early adopters lost trust, which is equivalent to India losing its footing in crypto,” Singhal explained. “If users can rebuild their portfolios through initiatives like KS, they regain confidence in the ecosystem. This benefits not just one exchange, but the entire Indian crypto market.”

What users want

When asked about user expectations, Singhal said that security, transparency, and usability are top priorities.

“Users want products that are secure, reliable, and simple to use. They don’t need to understand blockchain or DeFi mechanics—they want the benefit,” he told Gopal.

CoinSwitch has attempted to address these needs by allowing users to access DEX tokens directly with INR, eliminating complex wallet setups and gas fees. “This approach blends the advantages of centralized and decentralized exchanges,” Singhal added.

Future outlook: India as a global crypto leader

When asked about user expectations, Singhal said that security, transparency, and usability are top priorities.

“Users want products that are secure, reliable, and simple to use. They don’t need to understand blockchain or DeFi mechanics—they want the benefit,” he told Gopal.

CoinSwitch has attempted to address these needs by allowing users to access DEX tokens directly with INR, eliminating complex wallet setups and gas fees. “This approach blends the advantages of centralized and decentralized exchanges,” Singhal added.

Final words

Gopal concluded by asking about the long-term prospects for India’s crypto ecosystem. Singhal said, “India’s tech-savvy population and robust digital infrastructure position the country to lead in crypto adoption. With the right infrastructure, regulatory clarity, and user-first initiatives, the crypto revolution in India is bound to happen.”

This exclusive interview with The Crypto Times brings into focus the struggles and possibilities facing Indian crypto exchanges. Local platforms are dealing with regulatory challenges, security risks, and strong competition from international players. 

At the same time, by focusing on user needs, building innovative products, and operating within a clear regulatory framework, India has a real chance to become a global leader in the crypto space over the next few years.

Also Read: Spain Follows India’s Footsteps in Crypto Tax, Proposing Up to 47%