SUMMARY
While launching its retail trading during an event in India, Coinbase announced plans to increase its employee strength from the existing 300 to 1,000 by the year-end
Its investment arm "Coinbase Ventures" has invested more than $150 Mn in Indian crypto and web3 startups and intends to accelerate the investment plans further
On India’s 30% crypto tax and 1% TDS, Pankaj Gupta, Coinbase India head said, “the numbers are a bit high”
At a time when Indian crypto founders are racing to shift abroad citing unfavourable crypto taxation and lack of clarity on regulation matters, some of the biggest crypto exchanges Coinbase and Binance have been keenly looking to deepen their presence in India.
While Binance acquired the Indian crypto exchange WazirX in 2019, Coinbase has been a key investor in the Indian crypto ecosystem. The Coinbase team, led by founder and CEO Brian Armstrong, recently made a visit to key Indian cities and unveiled their grand India plan.
Setting its long term plans for the country, Coinbase, during its official launch event shared a broad roadmap for its India operations. Products, partnerships and hiring — are the three key areas where the company sets its eyes at.
Speaking about its India plans, Coinbase founder Brian Armstrong said, “It’s going to be a very long term journey. We don’t expect something to happen overnight here. There is going to be a lot of conversations and dialogue with regulators, policymakers, bank partners and payment providers.”
He further added, “We want to build a local team, create a lot of jobs here. But more importantly, help, bring this technology to the benefit of it in a safe and trusted way. And, I hope that people see our attentions are good and that we have come with humility and respect.”
Coinbase’s India Plans
Currently, Coinbase employs 300 people in India and plans to hire 1,000 more by the end of 2022. Speaking about India plans, Armstrong also averred that Coinbase is a remote-first company. The global crypto exchange also claimed that 100% of its employees are allowed to work from home.
“You can come to the office only if you want to,” Armstrong said.
The global crypto giant has recently partnered with payments gateways and banks to offer crypto-assets in INR using UPI transactions.
Interestingly, while the app does allow users to buy via UPI payments, the sell feature does not offer the same payments route but ‘bank only’ mode. Clicking on UPI payments, a request is raised and processed under the company name IPPOPAY Technologies. It’s worth noting that Coinbase Ventures is one of the investors in the digital payments gateway company IPPOPAY Technologies.
Right after the launch, the National Payments Corporation of India also issued a statement that it is not aware of any crypto exchange using UPI.
After the US SEC clipped the wings of Coinbase’s lending programme, the global crypto exchange shifted its focus towards other product lines including Coinbase Wallet, Cloud and NFT marketplace. And, India which ranks second on the global crypto adoption index deems fit to be the next market hub for Coinbase.
For the last few years, Coinbase Ventures has been the most active early-stage VC firm in the Indian crypto ecosystem. Its portfolio includes the likes of CoinSwitch Kuber, CoinDCX, Polygon, Instadapp, Vauld and more. Last year, it marked its first acquisition in India by buying artificial intelligence-powered support platform Agara.
Having invested more than $150 Mn into the Indian market, Coinbase Ventures will further accelerate its investments this year, said Shan Aggarwal, head of corporate development & ventures.
Coinbase Ventures along with Builders Tribe also hosted a startup pitch on April 8, 2022. Out of 100+ applications, Coinbase Ventures may invest up to $1 Mn into some of the winning startups.
Will India’s Crypto Tax Deter Coinbase India’s Plans?
On February 1, 2022, Finance Minister Nirmala Sitharaman had proposed 30% tax on income from crypto and 1% TDS on crypto assets’ transactions. Later, on Mar 21, 2022, bringing more clarity to the Finance Bill, 2022, (Now Act) the Indian government announced:
- While calculating 30% crypto loss from one crypto asset will not be counted against the income from other crypto assets
- The cost incurred for the setting up of infrastructure will not be counted as the cost of acquisition while taxing income from crypto mining
On Inc42’s query pertaining to the crypto tax, Pankaj Gupta, VP of Engineering, Coinbase and India head averred that while it’s a great sign that there was so much energy put into the Finance Bill on crypto taxation [by defining virtual digital assets in the bill].
“The numbers are [30% tax without any set-off plus 1% TDS] a bit high. However, we just announced the start of our experimentation with retail trading with Coinbase in India and if the commitment is for long term you don’t really look at kind of a certain point in time,” Gupta added.
Perceiving this as a step towards recognising crypto assets in India, Surojit Chatterjee, chief product officer, Coinbase said that smart regulations will pave the way for innovations by entrepreneurs.
“And, crypto is just the starting point, we are looking at web3 changing the internet. We are looking at metaverse and other brand new areas that are powered by crypto technology,” Chatterjee added.
On a lighter note, when quizzed about a trillion-dollar startup from India, Chatterjee said that this could be a reality in the next 5-7 years.
