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Coinbase made an announcement on Monday, revealing that it suspended new user registrations for its exchange product in India back in June. However, the company underlined its unwavering commitment to the Indian market, where it has faced regulatory challenges for more than a year. Coinbase issued a clarification in response to various media reports, including one featured in TechCrunch, which cited customer emails.Thank you for reading this post, don’t forget to subscribe!
The U.S.-based cryptocurrency exchange operator clarified that certain customers who did not meet the company’s updated standards had received these emails. These messages were not indicative of Coinbase’s overall operations in India. The emails informed users that they had until September 25 to withdraw their funds before the exchange services would be discontinued.
A spokesperson for Coinbase stated, “We stopped allowing new user sign-ups on our exchange product in India back in June of this year. We maintain a robust tech hub in the country and offer live products, including our Coinbase Wallet. We are committed to India over the long term and continue to explore ways to strengthen our presence in this important market.”
Coinbase’s eponymous exchange application, which has invested in leading Indian crypto exchanges CoinDCX and CoinSwitch Kuber, reportedly has fewer than 50,000 monthly active users in India, as per Sensor Tower data shared by an industry executive.
Despite its efforts, Coinbase has faced challenges in establishing relationships with local authorities for over a year since its initial launch in India. This lack of progress has been a source of frustration for company executives, including Durgesh Kaushik, who joined the firm as Senior Director for Market Expansion last year but left just months later.
Brian Armstrong, Coinbase’s CEO, visited India in the previous year to launch the exchange service by adding support for the widely used UPI payment instrument. However, the organization overseeing UPI payments immediately declined to acknowledge Coinbase’s launch in India. Shortly thereafter, Coinbase suspended support for the payment system.
Coinbase had stated at the time that it was committed to working with NPCI (National Payments Corporation of India) and other relevant authorities. They also mentioned their intention to explore alternative payment methods, although this never materialized.
In May of the previous year, Armstrong cited “informal pressure” from the Reserve Bank of India as the reason for halting trading services in India. He noted that cryptocurrency trading is not illegal in India, and the country had recently started taxing it. However, certain elements within the Indian government, including the Reserve Bank of India, appeared less enthusiastic about cryptocurrency and had been applying subtle pressure to discourage certain payments routed through UPI.
Over the past five years, Indian authorities have maintained a cautious stance on cryptocurrencies, highlighting the importance of international cooperation in managing these digital assets.
The G20 countries recently released a Leaders’ Declaration expressing endorsement for the Financial Stability Board’s (FSB) high-level recommendations regarding the regulation, supervision, and oversight of crypto-assets activities and markets, as well as global stablecoin arrangements.
The declaration called for the FSB and SSBs (standard-setting bodies) to promote the effective and consistent global implementation of these recommendations to prevent regulatory arbitrage. It also welcomed the IMF-FSB Synthesis Paper and Roadmap, aimed at developing a coordinated and comprehensive policy and regulatory framework, taking into account risks specific to emerging markets and developing economies (EMDEs), along with ongoing global FATF (Financial Action Task Force) standards implementation to address money laundering and terrorism financing risks.
It’s important to note that the earlier version of this story, which suggested Coinbase’s plan to discontinue services in India based on customer emails, has been comprehensively updated with Coinbase’s official statement.