SUMMARY
India is a unique market in the sense that the Supreme Court has ruled that they can't ban crypto: Armstrong
He said that the crypto exchange would prefer working with the government and focus on relaunching its services
Armstrong had earlier also questioned the “shadow ban”
Cryptocurrency exchange Coinbase’s CEO and cofounder Brian Armstrong has cited the “informal pressure” from the Reserve Bank of India (RBI) for the exchange stopping payments through the Unified Payments Interface (UPI) in India.
With the Indian cryptocurrency segment picking up rapidly, Coinbase made its debut in India on April 7 last month. While Coinbase wanted to appeal to users through UPI payment method, it had to disable the option within a few days of its launch.
“A few days after launching, we ended up disabling UPI because of some informal pressure from the Reserve Bank of India, which is kind of the Treasury equivalent there. And India is a unique market in the sense that the Supreme Court has ruled that they can’t ban crypto. But there are elements in the government there, including at the Reserve Bank of India, who don’t seem to be as positive on it ,” Armstrong said in an earnings call.
The Coinbase chief also claimed that the RBI was applying ‘soft pressure’ behind the scenes to try to disable payments which might be conducted through UPI. “I guess we have concern that they may be actually in violation of the Supreme Court ruling, which would be interesting to find out if it were to go there,” he added.
He was referring to the Supreme Court’s 2020 ruling in which the top court struck down the RBI’s banking ban on Bitcoin and other cryptocurrencies.The apex court ruled that the RBI circular, dated April 6, 2018, which virtually banned cryptocurrency trading in India, was illegal.
Earlier also Armstrong has raised questions about the legality of the “shadow ban”.
Soon after Coinbase’s India launch last month, in which it announced UPI payment option for trading in cryptocurrencies, the National Payments Corporation of India (NPCI), which owns and operates the UPI and approves the participation of customer banks, had come out with a statement.
“With reference to some media reports around the purchase of cryptocurrencies using UPI, National Payments Corporation of India (NPCI) would like to clarify that we are not aware of any crypto exchange using UPI,” NPCI said in the statement.
During the earnings call, Armstrong said that the crypto exchange would prefer working with the government and focus on relaunching the services.
“I think there’s a number of paths that we have to relaunch with other payment methods there. And that’s the default path going forward. So my hope is that we will (go) live back in India in relatively short order along with a number of other countries where we’re pursuing international expansion similarly,” he commented.
“One of our theories here and my theories is that, you know, action produces information. So it’s not always clear as we go to these countries all over the world, everybody is in varying states of education or lack thereof about crypto. And there’s a lot of work to go meet with policymakers around the world and, and kind of teach them about what the AML capabilities are and what are the positive benefits. The people of these countries generally really want crypto,” he added.
Armstrong is of the view that cryptocurrencies would eventually be regulated and be legal in most places in the free world and democracies, but it would take some time for these countries to get comfortable with it.
Meanwhile, the GST Council has nominated a panel to consider the proposal of levying 28% GST on services and transactions – purchases and payments – related to cryptocurrencies and Bitcoin. The crypto industry has reacted sharply to the move, saying it would considerably hinder the growth of the industry.
According to a Chainalysis report, India’s crypto market grew 641% from 2020 to 2021, turning India into one of the largest-growing cryptocurrency markets. In addition, more than 350 blockchain startups were operational in India in 2021, an Inc42 analysis found.
