Coinbase intends to return to India after being forced to shut down its operations in the country over a year ago.
According to TechCrunch, Coinbase has met with several authorities in India, including the Financial Intelligence Unit (FIU), a government agency that oversees financial transactions.
Coinbase’s previous attempts to establish crypto services in the country have been unsuccessful, including a 2022 integration with the India’s United Payments Interface (UPI) instant payments service, which was suspended after just three days. The service was halted because the National Payment Corporation of India stated that it did not recognize the legal standing of any crypto exchanges using UPI.
A year later, Coinbase was forced to pause all operations in India due to regulatory issues. Coinbase CEO Brian Armstrong later said that the crypto exchange had faced “informal pressure” from the Reserve Bank of India to cease trading in the country. While crypto trading is not illegal in India, the market remains small, partly due to the government’s 30% tax on crypto income and 1% deductions on each transaction.
Opening the Door
Coinbase hasn’t been the only crypto organization to face regulatory challenges in the country. Kraken and Binance were both forced to suspend operations in India after the exchanges faced accusations from the FIU that they were illegally operating in the country. The FIU requires more stringent disclosures on user activities than many governments.
However, Binance resumed crypto operations in India last year after assuring the FIU that it would fully comply with all requirements. This approval opened the door for other foreign crypto exchanges to operate in India. A Coinbase spokesperson told TechCrunch that the company “intends to comply with applicable regulatory requirements,” but declined to comment about any upcoming FIU registration.
An Innovation Hotbed
India has been a hub of payments innovation, driven by the country’s rapid adoption of UPI instant payments. UPI is now the most popular payment method in the world’s most populous nation, and its success has led India to establish similar operations globally.
Though crypto adoption in the country has been slow, Coinbase executives pointed to India’s strong community of Web3 developers. According to Cointelegraph, India had the highest rate of crypto adoption in the world last year, despite restrictions on foreign crypto exchanges.
