Coinbase, the American cryptocurrency exchange, is gearing up for a second attempt to establish its presence in India. More than a year after halting operations in the world’s most populous country, the company is working to re-enter the market, engaging with Indian authorities, including the Financial Intelligence Unit (FIU), according to sources familiar with the matter.
This move comes after Coinbase’s rocky history in India. In 2022, the exchange launched with high expectations, offering support for India’s widely-used Unified Payments Interface (UPI). However, the excitement was short-lived. Just three days after the launch, Coinbase had to suspend its UPI service when the National Payments Corporation of India declined to recognize its operations. Coinbase CEO Brian Armstrong later revealed that the company faced “informal pressure” from the Reserve Bank of India, effectively halting its plans.
Despite the challenges, Coinbase appears determined to make its mark in India. A spokesperson for the company stated, “Coinbase is excited by the opportunities in the Indian market and intends to comply with applicable regulatory requirements.” However, the timeline for its return depends on obtaining necessary approvals, including an operating license from the FIU.
Coinbase isn’t the only crypto exchange to face regulatory hurdles in India. Binance, the world’s largest cryptocurrency exchange, experienced a seven-month pause in operations before registering with the FIU last year. Its successful comeback could pave the way for Coinbase’s reentry into the market. Other exchanges, like Kraken, have also faced scrutiny, with the FIU labeling many as “illegally” operating until they complied with tighter user activity disclosure requirements.
Adding momentum to its renewed focus on India, Coinbase CFO Alesia Haas recently highlighted international expansion as a priority. Additionally, Paul Grewal, Coinbase’s chief legal officer, has joined the U.S.-India Business Council’s board of directors. Grewal emphasized India’s growing importance in the web3 ecosystem, noting the country’s booming developer community and innovative startups. “India has one of the largest and fastest-growing web3 ecosystems in the world,” he said.
The Indian crypto market remains relatively small, hindered by high taxes, including a 30% levy on crypto income and a 1% deduction per transaction. However, Coinbase’s re entry could fill a gap left by the collapse of WazirX, once a major player in the Indian market. With CoinSwitch and CoinDCX now leading the space — both backed by Coinbase — the exchange is positioning itself to capitalize on a market ripe for growth.
Coinbase’s comeback could signal a turning point for India’s crypto ecosystem. If successful, it may redefine the landscape and strengthen ties between the U.S. and India in the evolving world of digital finance.
