Coinbase’s Second Chance: A Daring Return to India’s Crypto Scene

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After a brief and rather tumultuous sojourn in 2022, Coinbase, the esteemed cryptocurrency exchange, is once again setting its sights on the burgeoning Indian market. The company, known for its unwavering determination, is currently engaged in earnest discussions with the Financial Intelligence Unit (FIU) and other Indian regulators, with the aim of securing the requisite approvals to resume operations in the subcontinent.

While the exact timeline for this ambitious endeavour remains shrouded in mystery, one thing is abundantly clear: Coinbase is not one to be deterred by past setbacks. Indeed, its renewed interest in India’s rapidly expanding crypto market serves as a testament to the company’s unyielding spirit and unwavering resolve.

Alas, Coinbase’s previous foray into the Indian market was, regrettably, short-lived. In April 2022, the exchange made its grand entrance, proudly boasting support for the widely-used Unified Payments Interface (UPI) system. However, fate, it seemed, had other plans. Just three days later, the National Payments Corporation of India (NPCI) distanced itself from Coinbase, effectively forcing the exchange to cease its services. To add insult to injury, the Reserve Bank of India subsequently exerted what CEO Brian Armstrong described as “informal pressure,” rendering it virtually impossible for the company to continue its operations.

One formidable challenge that remains is the matter of taxation. India’s crypto trading volume took a nosedive following the government’s introduction of a 30% tax on crypto income and a 1% transaction levy in 2022. Moreover, due to the persistent ambiguity surrounding regulatory matters, the majority of Indian banks have thus far refrained from engaging in transactions with crypto firms, making it exceedingly difficult for exchanges to provide seamless services.

Should Coinbase manage to successfully re-enter the Indian market, it stands poised to significantly shake up the existing crypto ecosystem, which is currently dominated by two local players, CoinSwitch and CoinDCX, both of which have received the backing of Coinbase itself. The recent demise of WazirX, which had once held the coveted title of India’s number one exchange, has left a considerable void that a global player like Coinbase might very well step into.

For the time being, Coinbase is proceeding with a degree of caution, striving to avoid the regulatory hurdles that had thwarted its previous attempt. The extent to which the company can successfully align itself with India’s evolving crypto policies will ultimately determine whether it can achieve success in this, its second attempt.

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2025-02-13 16:55