After leaving India in 2023 due to regulatory issues, Coinbase is re-entering the market.
The exchange plans to restart its retail services later this year. Coinbase Global Inc., one of the largest cryptocurrency exchanges, has officially registered with India’s Financial Intelligence Unit (FIU), signalling its return to the Indian market. This initiative comes after a nearly two-year hiatus from operating in the country.
With the FIU registration, the exchange will later in the year begin offering retail services, to be followed by more investments and product launches. There has not yet been any timeline for the relaunch announced.
A Troubled Past in India’s Crypto Space
Coinbase introduced its crypto trading platform in India in April 2022. The Unified Payments Interface (UPI) supports to facilitate smooth transactions.
The exchange halted its services following the National Payments Corporation of India (NPCI) clarifying that it did not know of any crypto exchange operating with UPI. It effectively shuts Coinbase out of the nation’s most widely used digital payment system.
Following the halt in services, Coinbase CEO Brian Armstrong later revealed that the company had faced informal pressure from the Reserve Bank of India (RBI). It likely influenced their decision to pause operations.
Notably, India’s position on cryptocurrency is unclear. Although the Union government has yet to set regulations for digital assets, it has imposed stringent taxation. Since 2022, crypto earnings have been taxed at 30%, and every transaction attracts a 1% tax deducted at source (TDS).
The government of India in early 2024 suppressed the offshore crypto exchanges that did not align with regional anti-money laundering (AML) legislation. Established industry leaders including Binance, KuCoin, and OKX were prohibited from offering services within the nation. The reason was that the exchanges were unable to register with the FIU.
Coinbase’s return could fill the gap left by the exchange WazirX. It reportedly lost nearly half its reserves in a security breach last year. In addition, Indian platforms like CoinSwitch and CoinDCX are backed by Coinbase.
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