Coinbase firm on India plans amid UPI doubts

Cryptocurrency exchanges had a bad weekend. Coinbase, which started its India journey last week, stopped UPI payments merely three days after opening the facility for Indian users. Meanwhile, Mobikwik stopped crypto trading through its wallet, hitting trading volumes.

Coinbase, the largest cryptocurrency exchange in the United States, had announced on Thursday last week, April 7, that it will allow payments through Unified Payments Interface (UPI) on its platform. The same day, National Payments Corporation of India (NPCI) issued a statement stating that it is not aware of any crypto exchange using UPI.

On Sunday, several users reported that the UPI payments facility on Coinbase is “temporarily available”. As of now, Coinbase is offering online transactions only through Immediate Payment Service (IMPS), which allows sale of crypto assets, but not purchase.

It is not clear whether Coinbase stopped the UPI payments of its accord or a direction in this regard was issued by NPCI to the cryptocurrency exchange.

After this initial hurdle, the American crypto platform reiterated its commitment to make a successful foray into India.

“Coinbase is proud to be hiring and investing in India, and to exploring ways to bring the potential of the crypto economy to India. India has a rich tradition of innovation and the burgeoning crypto ecosystem and adoption of the technology is a great example of this. As we enter the Indian market, we are actively experimenting with a number of payment methods and partners to enable our customers to seamlessly make their crypto purchases,” a company spokesperson told Fortune India.

“One of these methods is UPI, a simple to use and rapid payment system. 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,” the spokesperson further added.

According to a blog post by Coinbase founder and CEO Brian Armstrong, the company has already invested $150 million in home-grown Indian technology companies in the crypto and web3 space. The company had opened its Indian tech hub, which has 300 full-time employees. Coinbase is planning to hire over 1,000 employees in India during this year.

Coinbase, however, did not elaborate on plans to reinstate UPI on its platform or impact of its absence on the company’s India plans.

Queries to NPCI regarding any communication from Coinbase related to UPI payments remain unanswered too.

Meanwhile, homegrown digital wallet Mobikwik has stopped support for crypto trading. The app had partnered with several crypto exchanges like WazirX for facilitating sale and purchase of cryptocurrencies.

The company declined to comment on its decision to leave the cryptocurrency space.

These developments have added to the gloom in the Indian cryptocurrency space that followed the central government’s decision to impose a hefty 30% tax on gains from virtual digital assets, and prohibited offsetting losses in one crypto asset against another. A 1% TDS will also be held back each time you sell a crypto asset, whether there is profit or loss, and will be set-off against the crypto tax at the end of the year.

The industry stakeholders have expressed their dissatisfaction with the recent tax regulations pertaining to cryptocurrencies. The industry had expressed its unhappiness with the "no set off of losses" rule earlier as well and they had asked the government to revisit the provisions and discuss it with the stakeholders.