Coinbase Services in India Halted, Platform Not Recognized by Central Bank

Just several days after Coinbase launched in South Asia, the platform has already halted transactions for Indian users done through United Payments Interface (UPI) following regulatory concerns. The UPI is overseen by the National Payment Corporation of India (NPCI) —a special division of the Reserve Bank of India (RBI) —, used to facilitate buy orders on Coinbase’s India service.

Indian users have already been urged by the crypto exchange to instead place their orders on the platform through Immediate Payment Service (IMP). Coinbase is already looking into the matter, affirming that it is “committed to working with NPCI and other relevant authorities to ensure that we are aligned with local expectations and industry norms.”

An earlier statement was released on April 7 by the RBI, noting that the legal standing of any crypto exchanges using the RBI’s United Payments Interface (UPI) was not recognized despite Coinbase’s release of its services. “With reference to some media reports around the purchase of Cryptocurrencies using UPI, National Payments Corporation of India would like to clarify that we are not aware of any crypto exchange using UPI,” a comment declared.

Indian users of the platform appear to be unbothered by the sudden suspension of the platform’s services, particularly as a suitable regulatory framework for crypto remains absent since last year. At one point, India’s finance minister even grappled with the idea of potentially banning crypto altogether.

“Coinbase disabled UPI service in India a few days after NPCI statement. This is not new, Indian exchanges have also been facing payment service problems since 2018. Weird fact – Actual gambling apps get proper payment service support while crypto exchanges are being alienated,” tweeted Aditya Singh, co-founder of the YouTube channel Crypto India, on April 10.

Deputy governor of the Reserve Bank of India T. Rabi Sankar, along with other government officials, have expressed their support for a full ban. While this is still yet to be implemented, a 30% tax on crypto trading was already announced on March 31 — similar to the government’s tax on gambling. Despite this suspension, Coinbase Ventures’ planned $1 million investment in India’s crypto and Web3 industries — which was reported just last month — remains unaffected.

Source: CoinTelegraph