Coinbase denies halting India operations, struggles to break into Indian market

According to a report by Techcrunch, Coinbase is planning to discontinue all trading services for users in India and has warned some customers via email, marking the company's first move in the South Asian market over a year after facing regulatory challenges. However, a Coinbase spokesperson told the media that this is only for accounts that no longer meet updated standards, affecting only a small number of people.

Coinbase Notifies Some Indian Customers of Discontinuing Services

Coinbase has warned customers in a letter that it will stop providing services to them after September 25 and advised them to withdraw any funds from their accounts.

Coinbase is also an investor in top Indian cryptocurrency exchanges CoinDCX and CoinSwitch Kuber and has also prohibited Indian users from registering on its exchange platform, prompting them to download the Coinbase wallet instead.

Although causing discussions, a Coinbase spokesperson told the media that it is only targeting accounts that no longer meet updated standards.

This move comes after Coinbase spent 18 months reintroducing its services in India. The company failed to make any headway with local authorities, leading to the resignation of at least two key executives, including Durgesh Kaushik, who joined the company last year as Senior Director of Market Expansion.

Coinbase Prioritizes Indian Payment Market Despite Regulatory Hurdles

Coinbase CEO Brian Armstrong flew to India last year to launch exchange services in the country by adding support for the popular local UPI payment tool.

However, the payment institution overseeing UPI immediately refused to acknowledge Coinbase's launch in India, and a few days later, Coinbase ceased support for the payment system.

At the time, Coinbase stated that it was committed to working with NPCI and other relevant authorities and mentioned exploring other payment methods, which never materialized.

In May last year, Armstrong stated that due to "informal pressure" from the Reserve Bank of India, Coinbase had to suspend its trading services in India.

Armstrong pointed out that cryptocurrency trading is not illegal in India, in fact, it has recently begun to be taxed. However, there are certain elements within the government, including at the Reserve Bank of India, that seem not very favorable towards it. Hence, they, through what is being called a "shadow ban" in the media, are essentially exerting soft pressure behind the scenes, attempting to disable some payments that could potentially be made through UPI.

Over the past five years, Indian authorities have maintained a cautious stance on cryptocurrencies, emphasizing the need for international cooperation to manage these digital assets.

International Pressure: G20 Supports Comprehensive Regulation of Crypto Assets

G20 countries issued a leader's statement over the weekend, expressing support for the Financial Stability Board's (FSB) high-level recommendations on activities and markets involving crypto assets and global stablecoin arrangements.

"We call on the FSB and SSBs to drive the effective and timely implementation of these recommendations globally in a consistent manner to avoid regulatory arbitrage. We welcome the joint work program of the FSB and SSBs on crypto assets. We welcome the IMF-FSB comprehensive report, including a roadmap, supporting a coordinated and comprehensive policy and regulatory framework, considering all risks and specific risks of emerging market and developing economies (EMDEs), and the global implementation of FATF standards to address money laundering and terrorist financing risks."