Coinbase’s plans to launch a trading platform in India lie in disarray after the National Payments Corporation (NPCI) said it was “not aware of any crypto exchange” using its instant payment system.
NPCI’s clarification comes soon after Coinbase made its official debut in India, claiming its platform was supported by the country’s Unified Payments Interface (UPI).
UPI is a real-time payment mechanism accounting for 60% of retail payment traffic in the country. Last May, the NCPI, while not banning crypto transactions on the UPI system, advised banks to make their own decisions on whether to allow its use.
Last Sept, India’s biggest national lender, the State Bank of India (SBI), suspended crypto merchants’ access to the UPI payment facility without reason. It was assumed that risk concerns raised by the central bank were behind the decision.
Coinbase wants to capitalize on UPI popularity
UPI is a popular payment method in India with about 300 million monthly active users as of 2021. Coinbase’s adoption of UPI was seen as a major plus point.
The exchange’s app waitlists users for the UPI option. In response, a Coinbase spokesperson told Gadgets 360, “We are aware of the recent statement published by NPCI regarding the use of UPI by cryptocurrency exchanges. We are committed to working with NPCI and other relevant authorities to ensure we are aligned with local expectations and industry norms.”
As India is home to an estimated 15-20 million crypto users, the UPI rollout by Coinbase and any other crypto exchanges in India could be a breakthrough. The UPI-linked ecosystem is considered the most convenient option for making transactions in the country.
Binance’s domestic subsidiary, WazirX, supports only a handful of banks for transfers via internet banking, and the major banks are not supported at all.
Coinbase has made long-term plans to expand in India. Founder and CEO Brian Armstrong said at the Coinbase India launch, “Coinbase has a long-term plan for investing in India… We know it is not a straight shot to bring this technology and it will take time to evolve. Nothing will happen overnight.”
And the company has already placed a dedicated team to lead acquisitions and investments in the country.