US-based cryptocurrency exchange Coinbase has announced its decision to discontinue all services for users in India, following regulatory scrutiny by authorities in both India and the United States. In an email sent to customers, Coinbase stated that it would cease its services in India after September 25, advising customers to withdraw their funds from their accounts.
For Indian customers affected by this decision, they have several options. They can choose to withdraw their funds and exit their crypto positions entirely. Alternatively, they may link their accounts to other operational crypto exchanges in India and transfer their funds there.
The move comes after Coinbase faced challenges in India related to the use of the Unified Payment Interface (UPI) for depositing funds. In response to Coinbase’s announcement last year that Indian crypto users could deposit funds via UPI, the National Payments Corporation of India (NPCI) issued a statement expressing its lack of awareness regarding crypto exchanges’ use of UPI for customer deposits. Subsequently, UPI deposits were suspended across all exchanges in India.
Coinbase founder Brian Armstrong mentioned the “informal pressure” the exchange faced from the Reserve Bank of India, leading to the suspension of UPI deposits. He noted that India’s regulatory landscape is unique, with mixed responses from various authorities.
Coinbase to discontinue services in India later this month https://t.co/oT3tRpdpkr by @refsrc
— TechCrunch (@TechCrunch) September 11, 2023
While the Indian Supreme Court has ruled against banning cryptocurrencies, there have been instances of what’s colloquially referred to as a “shadow ban,” involving soft pressure applied behind the scenes to limit cryptocurrency-related activities. Coinbase had made investments in Indian crypto exchanges, such as CoinDCX and CoinSwitch Kuber.
In terms of crypto regulations, India has introduced measures to protect retail crypto investors, including a 30% tax on crypto profits and a 1% TDS (Tax Deducted at Source) on all transactions, effective from FY 2023. Additionally, India has been advocating for uniform global regulations on cryptocurrencies to prevent regulatory arbitrage. Recently, the G20 countries endorsed the Financial Stability Board’s recommendations for the regulation and supervision of crypto-assets activities and markets, as well as global stablecoin arrangements.
Please note that this information is subject to change, and it is advisable to refer to official sources and Coinbase’s announcements for the latest updates on this matter.
