On the heels of the pressure from local payment regulators, Coinbase has suspended several payment services on its recently launched Indian exchange.
Coinbase, the largest US-based cryptocurrency exchange, has suspended payment services via the United Payments Interface (UPI) on its platform for Indian consumers barely three days after its introduction in the South Asian peninsula.
The National Payment Corporation of India (NPCI) manages the UPI payment interface, which supports buy orders on Coinbase’s India services. For Indian consumers, the exchange has already changed its payment method information on its website, urging them to use Immediate Payment Service (IMP) to place sell orders.
The National Payments Corporation of India (NPCI) is a special subsidiary of the Reserve Bank of India (RBI) that reports to the Ministry of Finance.
On April 11, financial news outlet Business Standard reported that Coinbase stated that it was “committed to working with NPCI and other relevant authorities to ensure that we are aligned with local expectations and industry norms” and that it was “committed to working with NPCI and other relevant authorities to ensure that we are aligned with local expectations and industry norms.”
Even after Coinbase announced the launch of its services, the NPCI stated on April 7 that it did not recognize the legal standing of any crypto exchanges using the RBI’s United Payments Interface (UPI). The motive for the suspension could have come from this remark:
“Concerning 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.”
The abrupt interruption of service does not appear to have irritated Indian Coinbase users. Aditya Singh, the co-founder of the Crypto India YouTube channel, tweeted on April 11 to his 210,000 followers, “This is not new, Indian exchanges have also been suffering payment service problems since 2018.”
At this time, Indian crypto traders are probably used to the inconsistency of trading service accessibility. The Indian government has failed to develop a viable legislative framework for cryptocurrency, as market participants have witnessed multiple instances since last year where crypto appeared to be prohibited in the country.
Some Indian officials, including T. Rabi Sankar, deputy governor of the Reserve Bank of India, urge a complete ban. However, no such ban has yet materialized because the country put a 30% tax on cryptocurrency trading on March 31, which is identical to its gaming tax.
Coinbase Ventures, Coinbase’s investment arm, said last month that it would invest $1 million in the Indian crypto and Web3 industries. The fate of those plans does not appear to be jeopardized as a result of the exchange’s service stoppage.
