Coinbase Returns to India: Crypto Exchange Confirms Securing FIU Regulatory Nod
US-based cryptocurrency exchange Coinbase announced on Tuesday, March 11, that it has received the necessary approvals from India’s Financial Intelligence Unit (FIU), allowing it to re-enter the Indian crypto trading market. “Coinbase plans to launch its initial retail services later this year, followed by additional investment and products in India thereafter,” the company stated in a press release.
The announcement signifies a return for Coinbase, which ceased operations in India over a year ago due to regulatory challenges related to Unified Payments Interface (UPI) services. In 2023, the Indian government brought virtual digital assets (VDAs) like cryptocurrencies under the Prevention of Money Laundering Act (PMLA), 2002. This mandates that both offshore and onshore VDA service providers, including crypto trading platforms, comply with PMLA obligations and register with FIU-IND as reporting entities.
FIU-IND, a central government agency under the Union Ministry of Finance, is responsible for receiving, processing, analyzing, and disseminating information concerning suspicious financial transactions to enforcement agencies and foreign FIUs.
Coinbase’s return mirrors the actions of other foreign crypto exchanges that have resumed operations in India. For example, Binance registered with FIU-IND in August of last year after a seven-month regulatory pause. Coinbase could also potentially fill the void left by Indian exchange WazirX, which lost a significant portion of its reserves in a security breach last year. Other leading Indian crypto exchanges, such as CoinSwitch and CoinDCX, also receive support from Coinbase.
John O’Loghlen, regional managing director for APAC at Coinbase, stated, “India represents one of the most exciting market opportunities in the world today, and we’re proud to deepen our investment here in full compliance with local regulations. We’re committed to building in markets that believe in the potential of crypto and onchain innovation.”
The company is also looking to expand its crypto developer platform in India. O’Loghlen added, “By expanding access to our trusted platform and tools such as Base, we aim to empower a new generation of builders to stay home, innovate locally, and scale globally.”
In 2022, Coinbase initially launched its crypto trading services in India, supporting payments via the Unified Payments Interface (UPI) system. However, services were suspended shortly after following the National Payments Corporation of India (NPCI), the oversight body for UPI, stating it was unaware of any crypto exchange utilizing the service. CEO Brian Armstrong later indicated that Coinbase had ceased trading after facing “informal pressure” from the Reserve Bank of India.
Cryptocurrency’s status in India remains complex. While the government has not yet formulated regulations to legalize crypto assets, it has implemented a 30 percent tax on crypto income and a one percent deduction on each transaction since 2022. Furthermore, the government has shown support for blockchain development and central bank digital currencies (CBDCs) such as the RBI-issued e-rupee, even as mainstream tokens like Bitcoin face regulatory uncertainty.
