Coinbase Returns to India
US-based cryptocurrency exchange Coinbase has received the necessary approvals from India’s Financial Intelligence Unit (FIU) to re-enter the Indian crypto trading market.
Coinbase’s comeback follows other foreign crypto exchanges’ return to India.
“Coinbase plans to launch its initial retail services later this year, followed by additional investment and products in India thereafter,” a company release stated.
This announcement comes more than a year after Coinbase stopped operations in India because of regulatory difficulties involving UPI services.
In 2023, the Indian government brought virtual digital assets (VDAs) like cryptocurrencies under the Prevention of Money Laundering Act (PMLA), 2002. As a result, both offshore and onshore VDA service providers, including crypto trading platforms, are legally required to 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 related to suspicious financial transactions to enforcement agencies and foreign FIUs.
Coinbase’s return follows other foreign crypto exchanges that have resumed operations in India. Binance, for instance, registered with FIU-IND last August after a seven-month regulatory halt.
Coinbase could also fill the gap left by Indian exchange WazirX, which lost about half its reserves due to a security breach last year.
“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,” said John O’Loghlen, regional managing director for APAC at Coinbase.
The company also intends to expand its crypto developer platform in India.
“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,” O’Loghlen added.
Coinbase initially launched crypto trading services in India in 2022, supporting payments through the Unified Payments Interface (UPI) system. However, after a few days, Coinbase suspended its services when the National Payments Corporation of India (NPCI), the umbrella entity overseeing UPI, stated it was unaware of any crypto exchange using the digital payment service.
CEO Brian Armstrong reportedly said that Coinbase decided to halt trading after facing “informal pressure” from the Reserve Bank of India.
Cryptocurrency has had a turbulent history in India. While the government has not formulated specific regulations to legalize crypto assets, it has implemented a 30 percent tax on crypto income and a 1 percent deduction on each transaction since 2022.
