Coinbase, a leading cryptocurrency exchange, is actively pursuing a return to the Indian market after ceasing operations over a year ago. The company is in discussions with Indian authorities, including the Financial Intelligence Unit , to secure the necessary approvals for its re-entry.
This initiative aligns with India’s ongoing reassessment of its cryptocurrency regulations, influenced by global policy shifts. Economic Affairs Secretary Ajay Seth has emphasized that India’s approach to cryptocurrencies cannot be unilateral, given their borderless nature.
In April 2022, Coinbase launched its services in India, introducing support for the Unified Payments Interface , a widely used payment system in the country. However, the National Payments Corporation of India , which oversees UPI, stated it was “not aware of any crypto exchange using UPI,” leading to the suspension of Coinbase’s services within three days. CEO Brian Armstrong later revealed that the company faced “informal pressure” from the Reserve Bank of India, resulting in the halt of operations.
Despite stringent regulations and significant trading taxes, many Indians have continued to invest in cryptocurrencies. The government imposes a 30% income tax on crypto asset trading and a 1% tax deducted at source on transactions. These measures have posed challenges for the growth of the crypto market in India.
A Coinbase spokesperson expressed optimism about the Indian market, stating that the company plans to comply with all regulatory requirements. The timeline for Coinbase’s return depends on securing approvals, including an FIU operating license.
In August 2024, Binance, one of Coinbase’s major global competitors, resumed its operations in India after registering with the FIU, setting a precedent for overseas crypto exchanges to enter the Indian market compliantly. With Binance back and other global exchanges potentially following suit, the Indian crypto sector is poised for rejuvenation.
