Popular US-based crypto exchange Coinbase launched its trading services in India with much enthusiasm. This came even as trading volumes on Indian crypto selling platforms fell significantly and the regulatory environment in the country remained an uncertain one. Coinbase’s grand plans for the world’s second-largest internet market are not to be, it seems, as it has temporarily pulled the plug on purchasing cryptocurrencies using United Payments Interface (UPI).
You can sell cryptos on the Coinbase app using IMPS (Immediate Payment Service – a service that allows for instant electronic transfer of funds between banks through mobile phones). If you want to buy, however, then the app will tell you that purchases with “this payment method” – referring to UPI – are temporarily unavailable. And since there is no other buy mechanism currently supported in India at the moment, you can effectively conclude that Coinbase trading platform isn’t working for anyone for now.
In case you missed it, Coinbase announced that it would be rolling out trading services in the world’s second-largest internet market with much pomp on April 7. Its entry into India fit into the grand plans and long-term investments it had for the country. This includes increasing the number of employees in India this year from 300 to around 1,000, according to Coinbase CEO Brian Armstrong.
Additionally, the country was to be Coinbase’s technology hub to develop global products, with half of the new recruitments to consist of engineers. Overall, India will be accounting for a quarter of the 2,000 people the company plans to hire across product, engineering, and design categories this year. However, all these plans seem to have gone down the drain.
This comes after Coinbase faced heat from the National Payments Corporation of India (NPCI), and the latter clarified in a rare official statement that it was not aware of any crypto exchange using UPI. The NPCI is the regulatory body in charge of operating retail payments and settlement systems in India.
In response, a Coinbase spokesperson said, “As we enter the Indian market, we are actively experimenting with a number of payment methods and partners to enable our customers to seamlessly make their crypto purchases. One of these methods is UPI, a simple to use and rapid payment system.” They added that they were aware of the statement, and were committed to working with the NPCI and other relevant authorities to ensure that “we are aligned with local expectations and industry norms.”
Things are kind of in stasis for Coinbase’s India plans for now, but this is just a part of the problems that this digital asset class is facing in India. For one, India’s latest Union Budget has unveiled a 30% tax on the transfer of digital assets and a 1% tax on the transaction. A CBDC of the RBI will also be coming, making the going tougher for cryptos to operate in India.