The largest exchange in the United States temporarily stopped payment services to its newly opened Indian market due to pressure from local payment regulators. Three days after it launched operations in South Asia, Coinbase, the largest cryptocurrency exchange in the United States of America, suspended payment services via the United Payments Interface on its Indian platform.
The Unified Payments Interface is a payment interface that Coinbase manages. It allows for buy orders for its services in India. The exchange has updated its payment options information for Indian customers regarding placing sell orders. They encourage them to use the Immediate Payment Service (IMP) when they do so.
The Ministry of Finance has the National Payments Corporation of India, a separate subsidiary of the Reserve Bank of India (RBI). Coinbase said Monday in a Business Standard article that it would cooperate with Indian regulators and that it was committed to “working with NPCI, other relevant authorities, to ensure that our actions are consistent with industry norms and local expectations.”
On Thursday, 7th April, the National Payments and Clearing Corporation stated that it does not recognize any cryptocurrency exchanges using the RBI’s United Payments Interface. National Payments and Clearing corporation made this statement even though Coinbase has announced its launch. This statement could have been the reason for the suspension.
“According to media reports, the National Payments Corporation of India would like to clarify that they are not aware of any cryptocurrency exchange accepting payments via UPI”.
Users of Coinbase in India don’t appear to be affected by the sudden suspension of their service. Aditya Singh (a Cryptocurrency Enthusiast and Co-founder of the Crypto India YouTube channel) stated in his tweet on Monday to his 210,000 followers that what happened is not new. Indian exchanges have also had similar experiences with payment services since 2018.
Coinbase disabled UPI service in India few days after NPCI statement.
This is not new, Indian exchanges have also been facing payment service problem since 2018.
Weird fact – Actual gambling apps get proper payment service support while crypto exchanges are being alienated.
— Aditya Singh (@CryptooAdy) April 10, 2022
It appears that cryptocurrency traders in India are used to being inconsistent in trading services. This issue, however, doesn’t look good. The Indian government had failed to create a legal framework that would allow the adoption of cryptocurrency in the county even when it seemed that crypto was going to be banned, as last year from the experience of several market participants.
Some Indian officials are vying for a complete ban on cryptocurrencies in the country. The Deputy Governor of the Reserve Bank of India, T. Rabi Sankar, is a major proponent of this move. Meanwhile, the country has not decided to ban trading cryptocurrencies. They approved a 30 percent tax on any trade involving cryptocurrencies on 31st March, and this tax is the same as the country’s tax on gaming.
Coinbase Ventures (the investment arm of cryptocurrency exchange Coinbase) recently announced that they are making moves to invest $1,000,000 in India’s Web3 and crypto industries. It may appear that the recent issues would impede this move. Nevertheless, this new development is not a threat to the future of these plans, as the exchange has suspended service.