Coinbase Readies For Re-Entry Into Indian Cryptocurrency Market

Cryptocurrency exchange Coinbase has geared up to re-enter the Indian market more than a year after it rolled back operations from India.

The US-based online platform for buying, selling, transferring, and storing cryptocurrency has engaged various Indian authorities such as the Financial Intelligence Unit (FIU), under the finance ministry, two sources said, refusing to be identified as the deliberations are ongoing and private.

“Coinbase is excited by the opportunities in the Indian market and intends to comply with applicable regulatory requirements,” a spokesperson for the company told TechCrunch, declining to comment on the status of its FIU registration.

The development comes as Paul Grewal, chief legal officer at Coinbase, joined the board of directors of US-India Business Council this week. “I’m honoured to join the USIBC Board to help strengthen the bridge between India and the US in shaping the future of finance,” a statement shared by USIBC quoted him as saying. 

“India has one of the largest and fastest-growing Web3 ecosystems in the world, with a booming developer community, pioneering startups, and bold institutional adoptions. Since 2018, its share of global Web3 developers has quadrupled to 12%, the highest growth among emerging markets,” he said. 

The move follows Binance resuming operations in India last August after registering with FIU following a seven-month regulatory halt.

Coinbase entered the Indian markets in April 2022 with support for the United Payments Interface (UPI) system, but had to suspend the service just three days later after the National Payments Corporation of India, which oversees UPI, refused to acknowledge its operations.

Coinbase chief executive Brian Armstrong later disclosed that the company faced informal pressure from the Reserve Bank of India, which led to the trading halt September 2023. While the company initially set September 25, 2023 as the deadline for Indian users to withdraw their funds, it later extended it to October 31, 2023.

The development comes as India reviews its cryptocurrency stance. Economic affairs secretary Ajay Seth told Reuters this month that the Centre is re-examining its position on digital assets amid global policy shifts, marking a change from January 2024 when former RBI governor Shaktikanta Das had warned of risks from cryptocurrencies.

Domestic players too have begun venturing in the space, with Reliance Industries launching ‘JioCoin’ last month. The blockchain-based reward token is now integrated with JioSphere browser and Messages app.

According to a report by Chainalysis, India continues to lead global crypto adoption, despite its strict regulatory regime, which includes a 30% capital gains tax and 1% TDS on transactions above INR 10K.