Coinbase intends to withdraw its operations from India due to the country’s challenging regulatory environment.
In the latest development, crypto exchange Coinbase plans to discontinue crypto trading services in India by the end of the month. The exchange notified its Indian clients via email of significant regulatory challenges in India.
According to reports, Coinbase has already disabled user access to the exchange and prompted them to obtain the Coinbase Wallet. Consequently, the crypto exchange intends to end its services in India beginning September 25. The exchange has also instructed its Indian clients to evacuate any funds from their accounts.
After an 18-month effort to reintroduce its services in the country, Coinbase has decided to disengage from India. Despite their efforts, the company has encountered considerable difficulty obtaining approval from local authorities.
This conflict has led to the departure of at least two prominent executives, including Durgesh Kaushik, who joined the company last year as Senior Director for Market Expansion.
Coinbase also invests in Indian cryptocurrency exchanges like CoinSwitch Kuber and CoinCDX. While Coinbase is likely seeking an exit from India, it continues to expand its service offerings. Coinbase announced last week that it intends to enter the cryptocurrency lending business for US institutional clients.
Coinbase Faces Huge Obstacles in India
Coinbase CEO, Brian Armstrong personally flew to India in 2022 to establish the cryptocurrency exchange. They also announced their support for Unified Payments Interface (UPI), India’s most popular payment platform.
However, due to NPCI’s refusal to acknowledge Coinbase’s India launch, the exchange was forced to suspend the integration shortly after. Coinbase stated its dedication to collaborating with NPCI and other relevant authorities. However, these items could not develop further.
In May of the previous year, Armstrong disclosed that the exchange had to discontinue its trading service in India due to “informal pressure” from the Reserve Bank of India, the country’s central bank. Armstrong clarified that trading cryptocurrencies is not unlawful in India and that the government has only recently begun taxing them.
However, he noted that government officials, including those at the Reserve Bank of India, appeared to have a negative view of cryptocurrencies. As a result, there were rumors of a “shadow ban” in which behind-the-scenes pressure was applied to potentially restrict certain cryptocurrency-related payments, specifically those made through the UPI system.
The countries unveiled the Leaders’ Declaration during the recent G20 summit in India over the past weekend. All G20 members reaffirmed their support for the Financial Stability Board’s (FSB) recommendations for regulating and supervising crypto activities.
