Despite Coinbase’s promise to support the widely used Unified Payments Interface (UPI) three days after its introduction in India, the company deactivated the feature on Sunday and effectively ceased to allow consumers the opportunity to purchase. However, the Coinbase app still enables consumers to sell using IMPS (Immediate Payment Service).
Coinbase claimed UPI functionality on April 7 when the startup introduced trading services in India. It was just a few hours later that the National Payments Corporation of India (NPCI) stated that it was “not aware of any crypto trade via UPI.” The tweet was accompanied by an official statement from the NPCI.
Statement by NPCI as on 7th April 2022. With reference to some recent media reports around the purchase of Cryptocurrencies using UPI, National Payments Corporation of India would like to clarify that we are not aware of any crypto exchange using UPI. Please see attached document pic.twitter.com/lGTcaSLKeC
— NPCI (@NPCI_NPCI) April 7, 2022
The Indian central bank, RBI, has advised banks not to provide ordinary banking services for cryptocurrency transactions in 2018 under the NPCI, the country’s retail payments, and settlement system. In 2020, India’s Supreme Court ruled that the RBI’s order to not allow digital asset transactions were illegal.
By now, Indian crypto traders are probably used to a lack of predictability in the availability of trading services. Market players in India have been subjected to various periods of uncertainty since the beginning of the year when it seemed as though crypto might be outlawed in the nation.
Coinbase showing interest in the Indian market
Coinbase Ventures, Coinbase’s investment arm, announced this month that it will invest $1 million in Indian crypto and Web3 businesses. Those plans seem to be unaffected by the suspension of operations on the exchange.
A week ago, Coinbase landed in India, where it employs approximately 300 employees and is an active investor in a number of local crypto businesses, including CoinSwitch Kuber and CoinDCX, the two main local exchanges.
Another key competitor to Coinbase’s dominance in the Indian market is FTX, a considerably newer crypto exchange. An informed source claims that the company’s venture arm is actively courting a small number of start-ups around the nation.