Coinbase cryptocurrency trading platform announced it would be opening full-scale bitcoin trading in India using Unified Payments Interface (UPI). The National Payments Corporation of India, which created UPI, announced that the UPI system was not being used by any crypto-exchanges just moments after Coinbase made the announcement.
Coinbase Launches India. Hit with UPI Problem
Coinbase, a cryptocurrency exchange listed on the Nasdaq, announced Thursday that India’s retail traders will have full access to its trading platform.
Customers will be able buy crypto on Coinbase via the Unified Payments Interface, the most commonly used method of payment in India. Coinbase has been testing UPI payments since a few months ago. The company didn’t reveal the names of the banking partners that it used to make UPI payments.
UPI (an instant, real-time payment method developed by the National Payments Corporation of India) accounts for 60% of all retail payments in India. The NPCI, an umbrella organization for operating retail payments and settlement systems in India, is an initiative of India’s central bank, the Reserve Bank of India (RBI), and the Indian Banks’ Association (IBA).
Shortly after Coinbase’s announcement, the NCPI issued a statement emphasizing that it is unaware of any cryptocurrency exchange using the UPI payment system. The NPCI stated:
National Payments Corporation of India, in response to recent media reports about the purchase of cryptocurrency using UPI would like to confirm that there is no crypto exchange which uses UPI.
The NPCI stated that it would not prohibit crypto transactions using the UPI system. It advised banks to decide whether they will allow UPI to be used through their platforms. Most Indian banks are not willing to cooperate with cryptocurrency exchanges.
The Indian government is currently working on the country’s crypto policy. The government is taxing crypto income at 30%. There are no losses offsets and deductions. In India, crypto trading has seen a significant decline since April 1st when the tax changes came into effect. A 1% tax will be added to crypto transactions on July 1 (TDS).
In his speech at the event Brian Armstrong (CEO of Coinbase) acknowledged India’s regulatory hurdles. “We know it’s not going to be a straight shot to bring this technology. We don’t know exactly how it’s going to evolve,” he stressed, adding:
We’re committed to working with bank partners, regulators, and most importantly, the Indian people because they’ve shown a real spark of interest in cryptocurrency, and there’s a real desire to get access to some of these services and products.
“We are aware of the recent statement published by NPCI regarding the use of UPI by cryptocurrency exchanges. We are committed to working with NPCI and other relevant authorities to ensure we are aligned with local expectations and industry norms,” Coinbase told Tech Crunch Thursday.
On Monday, Armstrong announced his company’s plan for India, focusing on crypto and Web3. The plan also includes hiring over 1,000 people for Coinbase’s Indian hub. This Nasdaq-listed company invests in two Indian cryptocurrency exchanges, Coinswitch Kuber (and Coindcx).
Let us know your thoughts about Coinbase’s India launch and the UPI issue. Comment below.
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