- Coinbase has decided to terminate exchange services for Indian users due to regulatory challenges, affecting over 50,000 monthly active users
- Despite launching in India in 2021, Coinbase faced obstacles and had to suspend support for the UPI payment method
- Indian authorities have maintained a cautious stance on cryptocurrencies, and the G20 countries are moving toward global cryptocurrency regulation
Coinbase has announced its decision to terminate all exchange services for users in India, citing regulatory challenges. The move comes over a year after the company’s initial foray into the South Asian market. Coinbase has notified its Indian customers that it will cease its services after September 25 and is urging them to withdraw their funds from their accounts. New signups from India have also been disabled, with users being directed to download Coinbase Wallet instead. According to data from Sensor Tower, the Coinbase exchange app has fewer than 50,000 monthly active users in India, reflecting the difficulty the company has had in expanding its footprint.
Indian Authorities Throttled Access to Coinbase
Coinbase launched its Indian services in 2021, but its attempts to establish a foothold in the country have faced significant hurdles and led to the departure of key executives, including Senior Director for Market Expansion Durgesh Kaushik.
Coinbase’s CEO, Brian Armstrong, visited India in an effort to launch the exchange service by incorporating support for the popular UPI payment method. However, India’s UPI governing body rejected Coinbase’s India launch, leading to the suspension of UPI support.
Despite cryptocurrency trading not being illegal in India, Coinbase encountered “informal pressure” from the Reserve Bank of India, prompting the halt of trading services in the country. This pressure, often likened to a “shadow ban,” involved subtle behind-the-scenes efforts to impede cryptocurrency payments via UPI.
Bitcoin Can “Spoil Our Youth”
Indian authorities have maintained a cautious stance on cryptocurrencies for the past five years, emphasizing the need for international collaboration in regulating these digital assets. Just months after Coinbase’s launch in India, Prime Minister Narendra Modi publicly argued that Bitcoin could “spoil” the country’s youth.
In a recent development, the G20 countries endorsed the Financial Stability Board’s high-level recommendations for regulating crypto-assets activities, markets, and global stablecoin arrangements. This signals a broader global movement toward regulating the cryptocurrency space.