Coinbase plans to cease all exchange services for users in India, it has warned some customers in email, over a year after the company’s debut in the South Asian market faced regulatory challenges.
The global crypto exchange is warning customers that it will be discontinuing services for them after September 25 and advising them to withdraw any funds they have in their accounts.
Coinbase, which is also an investor in top Indian crypto exchanges CoinDCX and CoinSwitch Kuber, has additionally disabled users in India from signing up to its exchange, prompting them to download the wallet, Coinbase Wallet, instead.
The move follows an 18-month effort from Coinbase to relaunch its service in India. The company hasn’t been able to make any inroads with the local authorities, something that has led to the departure of at least two prominent executives, including Durgesh Kaushik, who joined the firm last year as Senior Director for Market Expansion.
Coinbase’s chief executive Brian Armstrong flew to India last year to launch the exchange service in the country by adding support for the locally popular UPI payment instrument.
However, the payments body that oversees UPI immediately refused to acknowledge Coinbase’s India launch and days later Coinbase suspended support for the payments system.
Coinbase at the time said it was committed to working with NPCI and other relevant authorities and said it was experimenting with other payments methods, something that never materialized.
In May last year, Armstrong said Coinbase had to halt the trading service in India because of “informal pressure” from the Reserve Bank of India, India’s central bank.
Armstrong pointed out that cryptocurrency trading is not illegal in India — in fact, the South Asian nation just recently started to tax it — but there are “elements in the government there, including at Reserve Bank of India, who don’t seem to be as positive on it. And so they — in the press, it’s been called a ‘shadow ban,’ basically, they’re applying soft pressure behind the scenes to try to disable some of these payments, which might be going through UPI,” he said.
For the past five years, Indian authorities have maintained a careful stance on cryptocurrencies, emphasizing the need for international collaboration to manage these digital assets.
The G20 countries unveiled a Leaders’ Declaration over the weekend that said the nations endorse the Financial Stability Board’s (FSB’s) high-level recommendations for the regulation, supervision and oversight of crypto-assets activities and markets and of global stablecoin arrangements.
“We ask the FSB and SSBs to promote the effective and timely implementation of these recommendations in a consistent manner globally to avoid regulatory arbitrage. We welcome the shared FSB and SSBs workplan for crypto assets. We welcome the IMF-FSB Synthesis Paper, including a Roadmap, that will support a coordinated and comprehensive policy and regulatory framework taking into account the full range of risks and risks specific to the emerging market and developing economies (EMDEs) and ongoing global implementation of FATF standards to address money laundering and terrorism financing risks.”