Coinbase Prepares to Re-Enter Indian Crypto Market
Coinbase, a leading U.S.-based cryptocurrency exchange, is gearing up for a return to the Indian market after ceasing operations over a year ago. The company is currently working with Indian regulators, including the Financial Intelligence Unit (FIU), to secure the necessary approvals for its relaunch.
A Fresh Approach to Compete with Local Exchanges
In its latest attempt, Coinbase aims to reintroduce its centralized exchange platform, positioning itself against established Indian crypto platforms like CoinDCX and CoinSwitch. To avoid past hurdles, the company is focusing on building local partnerships and refining its market strategy.
Coinbase initially launched in India in April 2022, offering support for the Unified Payments Interface (UPI), a popular mobile payment system. However, within three days, the National Payments Corporation of India (NPCI) refused to acknowledge Coinbase’s use of UPI, forcing the exchange to suspend services. Additionally, pressure from the Reserve Bank of India (RBI) further complicated operations, as many banks remained hesitant to engage with cryptocurrency firms despite the absence of a legal ban on crypto trading.
Regulatory Challenges and Market Potential
India’s strict regulatory stance on cryptocurrency includes a 30% tax on crypto earnings and a 1% tax deducted at source (TDS) on transactions, policies introduced in 2022. Despite these constraints, interest in the Indian crypto market remains strong. Coinbase’s renewed engagement with regulators signals its commitment to gaining a foothold in one of the world’s fastest-growing crypto markets.
As part of its comeback strategy, Coinbase executives are expected to visit India in March for discussions with the FIU. The company plans to relaunch its exchange once regulatory approvals are secured, though the timeline will depend on how quickly the approval process unfolds, potentially extending into late 2025.
Impact on India’s Crypto Regulations
The return of major global exchanges like Coinbase could reignite discussions on clearer cryptocurrency regulations in India. Industry experts hope that the involvement of international players and evolving global perspectives on digital assets may encourage Indian authorities to establish a more defined regulatory framework.
Coinbase’s re-entry highlights the dynamic nature of India’s cryptocurrency sector and the ongoing negotiations between industry leaders and policymakers.
