Coinbase India Suspends Deposits 3 Days After Trading Service Launch

Three days after Coinbase launched trading services in India, claiming support for the popular payment instrument Unified Payments Interface (UPI), the firm disabled the function and virtually stopped offering users the option to buy on Sunday. The Coinbase app is, however, still allowing customers to sell through IMPS (Immediate Payment Service). 

• Coinbase launched trading services on April 7 in the presence of CEO Brain Armstrong, where the company claimed support for UPI. But within a few hours, the National Payments Corporation of India (NPCI) tweeted, clarifying that it’s “not aware of any crypto exchange using UPI.” NPCI also attached a formal statement to the tweet.
• The NPCI is retail payments and settlement system under the Indian central bank, RBI, which asked banks not to offer regular banking services to crypto transactions in 2018. Although the Supreme Court of India overruled the RBI direction as illegal in 2020, banks have not been facilitating transactions involving digital assets.
• Beginning April 1, e-wallet Mobilink, used by at least six major crypto exchanges for payments, also stopped servicing crypto transactions.
• Reacting to the development, an unnamed Coinbase spokesman was quoted by Tech Crunch as saying:

“We are aware of the recent statement published by NPCI regarding the use of UPI by cryptocurrency exchanges. We are committed to working with NPCI and other relevant authorities to ensure we are aligned with local expectations and industry norms.”

• In a blog post on April 4, Armstrong announced that his company was planning to hire 1,000 employees in India this year alone.
• He also informed about two separate events on April 7 and April 8, the first to discuss the future of crypto and web3 in India by the exchange. The second was a startup pitch event to be hosted by Coinbase Ventures, the investment arm of Coinbase. It invests in two leading Indian crypto exchanges — CoinSwitch Kuber and CoinDCX.
• Coinbase is also reportedly close to buying 2TM, which holds the largest crypto exchange in Latin America – Mercado Bitcoin.