Coinbase, the U.S.-based cryptocurrency exchange, has reaffirmed its commitment to India, despite temporarily suspending new user sign-ups for its exchange product in the country. This announcement comes in the wake of an email sent by Coinbase to several Indian customers, stating that it would halt exchange operations in India after September 25.
According to Coinbase, the decision to disable new user registrations in India was made back in June of this year. However, the company emphasizes its dedication to the Indian market, where it maintains a thriving tech hub and continues to offer live products, including the Coinbase Wallet.
A spokesperson for Coinbase stated, “We are committed to India over the long term and continue to explore ways to strengthen our presence in this important market.”
It is important to note that Coinbase’s eponymous exchange app, despite having fewer than 50,000 monthly active users in India according to Sensor Tower data, holds a prominent position among cryptocurrency enthusiasts in the country. Notably, Coinbase is also an investor in leading Indian crypto exchanges, CoinDCX and CoinSwitch Kuber, both of which remain operational.
Coinbase’s struggles in India extend over a year, with the company encountering challenges in building rapport with local authorities. Despite launching the exchange in India and even adding support for the popular UPI (Unified Payments Interface) payment method, Coinbase faced resistance from the body overseeing UPI. This led to Coinbase suspending support for UPI.
Cryptocurrency trading itself is not illegal in India; in fact, the country has begun taxing it recently. However, the central bank, Reserve Bank of India, has applied informal pressure that has made it challenging for Coinbase to operate smoothly in the country. This situation has been referred to as a ‘shadow ban,’ as the government and the central bank have been discreetly influencing payment transactions related to cryptocurrencies.
For the past five years, Indian authorities have adopted a cautious approach to cryptocurrencies, emphasizing the need for international collaboration in regulating these digital assets.
Over the weekend, the G20 nations released a Leaders’ Declaration endorsing the high-level recommendations of the Financial Stability Board (FSB) for regulating crypto-assets activities and markets, as well as global stablecoin arrangements. The declaration emphasized the need for consistent global implementation to prevent regulatory arbitrage and highlighted the importance of addressing money laundering and terrorism financing risks through ongoing implementation of FATF (Financial Action Task Force) standards.
