Coinbase suspends crypto payment services days after launch in India

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The largest US-based crypto exchange Coinbase has suspended payment services via United Payments Interface (UPI) on its platform for Indian users just three days after its launch in the South Asian subcontinent.

The UPI is the payment gateway managed by the National Payment Corporation of India (NPCI) that facilitates purchase orders for Coinbase’s India services. The exchange has already updated its payment method information on its website for Indian users, prompting users to try the Immediate Payment Service (IMP) to place sell orders.

The NPCI is a special department of the Reserve Bank of India (RBI) reporting to the Ministry of Finance.

The financial news agency Business Standard reported on 11 industry standards.”

The NPCI said in a statement dated Jan Explanation that it does not recognize the legal status of crypto exchanges that use RBI’s United Payments Interface (UPI), even after Coinbase announced the release of its services. The impetus for the suspension may have come from this remark:

“Referring to some media reports of cryptocurrency purchases using UPI, the National Payments Corporation of India would like to clarify that we are not aware of any crypto exchanges using UPI.”

Indian Coinbase users don’t seem upset by the sudden shutdown of the service. Crypto India YouTube channel co-founder Aditya Singh tweeted to his 210,000 followers on April 11, “This is not new, Indian exchanges have also been struggling with payment service issues since 2018.”

At this point, Indian crypto traders are probably used to the instability in trading service accessibility. The Indian government has been scrambling to adopt an appropriate regulatory framework for crypto as market participants have experienced several moments since last year where it looked like crypto might be banned in the country.

Some Indian officials, such as T. Rabi Sankar, deputy governor of the Reserve Bank of India, would support a total ban. However, such a ban has yet to come as the country enacted a 30 percent tax on crypto trades on March 31, which is similar to the gambling tax.

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Coinbase Ventures, Coinbase’s investment arm, announced last month that it plans to invest $1 million in the Indian crypto and Web3 industries. The fate of these plans does not yet appear to be affected by the exchange’s service disruption.