Three days after its launch on the South Asian subcontinent, Coinbase, the largest US-based cryptocurrency exchange, has stopped payments through United Payments Interface (UPI), its platform for Indian users.
UPI is a payment portal governed and managed by the National Payment Corporation of India. It facilitates Coinbase’s India services. Indian users have already been updated by the exchange’s payment method information. They are encouraged to use Immediate Payment Services (IMP) to place their sell orders.
The NPCI, a special division of Reserve Bank of India (RBI), is under the Ministry of Finance.
Business Standard, a financial news outlet, reported that Coinbase said that it would seek to resolve the situation in India with appropriate regulators. It also stated that it was “committed” to working with NPCI (and other relevant authorities) to ensure that our expectations are met and we adhere to industry norms.
In an April 7 statement, the NPCI stated that it does not recognize any cryptocurrency exchanges that use the RBI’s United Payments Interface. This was even after Coinbase had announced its release. This comment may have been the catalyst for the suspension.
“Regarding media reports about the purchase of Cryptocurrencies using UPI. National Payments Corporation of India would love to clarify that we don’t know of any crypto-exchange using UPI.”
The sudden suspension of service for Indian Coinbase users does not seem to have affected them. Aditya Singh (co-founder of Crypto India YouTube channel) tweeted his 210,000 followers that “This isn’t new. Indian exchanges have also faced payment service problems since 2018”
Coinbase has stopped UPI service in India within days of the NPCI statement. This is not a new problem. Indian exchanges also have a payment service issue since 2018. Strange fact: Crypto exchanges are being alienated while actual gambling apps receive proper payment service support.
— Aditya Sing (@CryptooAdy), April 10, 2022
Indian crypto traders have likely become accustomed to instability in trading services accessibility. As market participants experienced several instances last year when it appeared that crypto might be banned, the Indian government has been unable to create a regulatory framework suitable for crypto.
T. Rabi Sankar (deputy governor of the Reserve Bank of India) is one of those Indian officials who would support a complete ban. The country has enacted a 30% tax for crypto trading on March 31, which is similar to its gambling tax. However, such a ban has not yet been implemented.
Similar: Web3 State: Opportunities around the World: Talks by Community
Coinbase Ventures, Coinbase’s investment arm, announced last month that it would invest $1 million in Indian crypto and Web3 sectors. These plans are not likely to be affected by Coinbase’s suspension of service.