Coinbase, the largest crypto exchange in the United States, has halted payment services for Indian users via the United Payments Interface (UPI) on its platform, just three days after its introduction in the South Asian peninsula.
The National Payment Corporation of India (NPCI) manages the UPI payment system, which enables Coinbase’s India services to accept buy orders. For Indian consumers, the exchange has already changed its payment method information on its website, advising them to use Immediate Payment Service (IMP) to place sell orders.
The Reserve Bank of India (RBI) has a specific section inside the Ministry of Finance called the National Payments Corporation of India (NPCI).
Coinbase indicated on Monday that it would work with the proper regulators to correct the problem in India, and that it was “committed to working with NPCI and other relevant authorities to ensure that we are aligned, with local expectations and industry regulations,” according to Business Standard.
Even after Coinbase announced the launch of its services, the NPCI said in a statement on Thursday that it did not recognise any crypto exchanges using the RBI’s United Payments Interface (UPI). It’s possible that this remark prompted the suspension:
“With relation to recent media stories regarding the purchase of Cryptocurrencies using UPI, the National Payments Corporation of India would like to clarify that we are not aware of any crypto exchange using UPI.”
The abrupt stoppage of Coinbase service does not appear to be bothering Indian Coinbase users. “This is not new, Indian exchanges have also been experiencing payment service problems since 2018,” Aditya Singh, co-founder of the Crypto India YouTube channel, tweeted to his 210,000 followers on Monday.
Coinbase Ventures invested in India’s crypto industries
Indian cryptocurrency traders are probably used to trading service accessibility being unstable at this stage. Since last year, when it appeared that crypto would be banned in India, the Indian government has struggled to develop a viable regulatory framework for the cryptocurrency.
T. Rabi Sankar, deputy governor of the Reserve Bank of India, is one Indian official who supports a complete prohibition. However, no such prohibition has yet been enforced, as the country enacted a 30% tax on cryptocurrency trading on March 31, which is identical to its gaming tax.
Last month, Coinbase Ventures, the company’s investment arm, made a $1 million investment in India’s crypto and Web3 industries. The exchange’s service suspension appears to have had no impact on their plans so far.