Coinbase to Cease Exchange Services in India

Coinbase, the global crypto exchange, has announced plans to discontinue all exchange services for users in India. In an email sent to some customers, the company stated that it will terminate services after September 25 and advised users to withdraw any funds from their accounts.

Disabling Sign-ups and Promoting Coinbase Wallet

In addition to discontinuing its services, Coinbase has disabled users in India from signing up to its exchange. Instead, the company is urging them to download Coinbase Wallet, a digital wallet offered by Coinbase.

A Struggle with Regulatory Challenges

Over the past 18 months, Coinbase has made efforts to relaunch its service in India. Despite its investments in Indian crypto exchanges CoinDCX and CoinSwitch Kuber, Coinbase has been unable to make progress with local authorities. The company saw the departure of key executives, including Durgesh Kaushik, who joined as Senior Director for Market Expansion last year.

An Unsuccessful Launch Attempt

Last year, Coinbase’s CEO Brian Armstrong visited India to launch the exchange service by adding support for the locally popular UPI payment instrument. However, the payments body overseeing UPI refused to acknowledge Coinbase’s India launch, leading Coinbase to suspend support for the payment system.

Pressure from the Reserve Bank of India

In May last year, Armstrong disclosed that Coinbase had to halt trading services in India due to “informal pressure” from the Reserve Bank of India. While cryptocurrency trading is not illegal in India, certain elements within the government, including at the Reserve Bank of India, have shown a lack of enthusiasm towards it.

Indian Authorities’ Stance on Cryptocurrencies

Indian authorities have maintained a cautious approach to cryptocurrencies over the past five years, emphasizing the importance of international collaboration in managing these digital assets. The recent G20 Leaders’ Declaration also mentioned the endorsement of the Financial Stability Board’s recommendations for the regulation and oversight of crypto-assets activities and markets.

As the regulatory environment remains uncertain, Coinbase’s decision to cease its exchange services in India reflects the challenges faced by crypto companies operating in the country.