Coinbase, the global cryptocurrency exchange, has recently announced that it will be discontinuing its services for users in India on September 25. This decision comes over a year after the company faced regulatory challenges upon entering the South Asian market. Customers have been notified via email about the upcoming cessation and have been advised to withdraw any funds they have in their Coinbase accounts.
Coinbase, the global cryptocurrency exchange, is discontinuing its services for users in India on September 25. This decision comes as the company has faced regulatory challenges and failed to secure a relaunch in the country. Coinbase urges its Indian customers to withdraw their funds from their accounts before the cessation date.
Additionally, Coinbase has disabled new signups from India on its exchange platform. Instead, it is encouraging users to download its wallet, Coinbase Wallet, as an alternative. According to Sensor Tower data shared by an industry executive, Coinbase’s exchange app currently has fewer than 50,000 monthly active users in India.
Regulatory Hurdles and Failed Relaunch Attempts
This move by Coinbase follows its 18-month effort to relaunch its services in India. Unfortunately, the company has faced challenges in making any progress with the local authorities. This has resulted in the departure of key executives, including Durgesh Kaushik, who joined Coinbase in 2020 as the Senior Director for Market Expansion.
Last year, Coinbase’s CEO, Brian Armstrong, visited India to launch the exchange service by adding support for the popular local payment instrument, UPI (Unified Payments Interface). However, the payments body overseeing UPI refused to acknowledge Coinbase’s India launch. As a result, Coinbase suspended support for the payments system.
Armstrong explained that while cryptocurrency trading is not illegal in India, there are elements within the government, including the Reserve Bank of India, that are not supportive of it. Despite this, India has recently started to tax cryptocurrencies. Coinbase expressed its commitment to working with NPCI (National Payments Corporation of India) and other relevant authorities but did not succeed in finding a resolution.
Indian Authorities’ Stance on Cryptocurrencies
For the past five years, Indian authorities have maintained a cautious approach to cryptocurrencies, emphasizing the need for international collaboration in managing these digital assets. The recent G20 Leaders’ Declaration endorsed the recommendations put forth by the Financial Stability Board (FSB) regarding the regulation and oversight of crypto assets activities and markets.
The declaration highlighted the importance of implementing these recommendations globally to avoid regulatory arbitrage. It also acknowledged the need for a comprehensive policy and regulatory framework, taking into account the risks associated with emerging markets and developing economies.