- The Nasdaq-listed exchange launched trading services in India on April 7.
- It had claimed support for retail payments and settlement system UPI.
- NPCI that runs UPI said it doesn’t offer services to any crypto exchange.
Coinbase which launched trading services in India on April 7 suspended the option to buy cryptocurrencies for Indian users on Sunday. The sudden backing-out of the largest exchange came after the National Payments Corporation of India (NPCI) refused to acknowledge Coinbase as using one of its retail payments and settlement systems, Unified Payments Interface (UPI).
Coinbase had claimed support for UPI
At the time of its launch, Coinbase had claimed to have support for UPI that facilitates easy, instant, and economical inter-bank smartphone-based payments in India. The exchange has, however, maintained the option to sell digital coins through IMPS (Immediate Payments System), another NPCI product.
In a statement released on Twitter hours after the launch of Coinbase trading services in India, NPCI said, “With reference to some recent 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.”
Following the NPCI statement, Coinbase reportedly reached out to NPCI. Leading business daily, The Economic Times quoted an unnamed source as saying, “They (Coinbase) reached out to NPCI following the clarification. But it means little as clearly cryptocurrency is not a legal tender in India. A regulatory body like the NPCI will not approve it unless it is officially legal.”
Indian banks have been refusing to process crypto transactions, making it difficult for millions of investors and 10-odd major Indian exchanges to conduct their business. Although a Supreme Court ruling in 2020 set aside an RBI directive that in 2018 had asked banks not to provide banking services, banks are still not servicing transactions involving cryptocurrencies.
Coinbase’s India Push
ZyCrypto had earlier reported that Coinbase is planning to hire over 1,000 people in India this year in addition to about 300 it has at present. In a recent blog, CEO Armstrong had also hinted that the Nasdaq-listed exchange is looking for new opportunities for investments.
“Coinbase Ventures has already invested $150 million in home-grown Indian technology companies in the crypto and web3 space, and is constantly identifying new opportunities to help Indian founders scale,” Armstrong said in his blog.