Coinbase halted trading services in India due to “informal pressure” from the Reserve Bank of India, the crypto exchange’s chief executive said on Tuesday, tackling the infamous India episode for the first time in a month.
The Nasdaq-listed company launched its eponymous crypto trading service in India with much fanfare on April 7. This app allows users of the world’s second largest internet marketplace to purchase crypto tokens using UPI, the hugely popular Indian payments infrastructure built by a coalition of retailers. bank. But just three days after launch, the company canceled the service without explanation.
The move follows bizarre statements from the National Payments Corporation of India, the regulatory body that oversees UPI in the country, which refused to acknowledge UPI’s support of the Coinbase app.
Asked about the company’s earnings call episode in India, Coinbase co-founder and chief executive Brian Armstrong said Coinbase disabled UPI “due to informal pressure from the Reserve Bank of India.”
Armstrong points out that cryptocurrency trading is not illegal in India—in fact, the South Asian country is only just starting to tax it—but that there are “elements in the government there, including at the Reserve Bank of India, that don’t appear to be doing it. be positive about it. So they – in the media it’s called ‘ghost ban’, they basically apply a little bit of pressure behind the scenes to try to disable some of these payments, which may be through UPI,” he said.
The Reserve Bank of India’s action “may actually violate the Supreme Court’s ruling, which will be interesting to see if it will be overturned. But I think our preference is really to work with them and focus on recovery. I think there are a number of avenues we need to revive with other payment methods out there. And that is the default way forward,” he said.
The Reserve Bank of India previously banned cryptocurrencies — a decision overturned by the country’s top court more than two years ago — but the central bank continues to informally pressure banks not to get involved in cryptocurrency exchanges, TechCrunch previously reported.
This pressure – and bank compliance – is why India’s popular cryptocurrency exchanges regularly face issues supporting fiat currencies in the country. An executive at one of the cryptocurrency exchanges told TechCrunch that he could also challenge the central bank’s actions in court, but warned that such legal battles could take years and their businesses could be destroyed by then, which is why crypto players in India hope that the central bank will loosen its stance on its own in some time.
Armstrong added:
I guess just to zoom out for a second, one of our theories here and mine is that actions produce information. So it’s not always clear when we go to these countries around the world, everyone has a different level of education or lack of education about crypto. And there’s a lot of work to be done and meeting with policymakers around the world and explaining to them what AML capabilities are and what their positive benefits are. People in these countries usually really want crypto. And for me, that is to say, most places in the world are free and democratic, crypto will eventually be regulated and legal, but it will take time for them to get comfortable with it.
And the way we move the conversation forward is by taking action. That’s why we’re going to launch, although we don’t know exactly how it goes – feedback is welcome, we’re launching because it forces discussion. Now the press is talking about it in India. Now there is a meeting where we will talk about how we will take the next steps. So that’s generally our approach with international expansion.
