Coinbase, the popular US-based crypto exchange that launched its services in India last week, has suspended support for UPI payments after the National Payments Corporation of India (NPCI) issued a statement on April 7, refusing to recognise Coinbase’ UPI-linked crypto-buying feature. Coinbase was quick to respond to the NPCI statement stating that the crypto trading platform is committed to adhering to India’s rules and regulations. Clients of the crypto exchange in India are currently unable to purchase cryptocurrencies via UPI as a payment method with a ‘Currently unavailable’ error on display.
The removal of UPI appears to be a worrying sign for Coinbase users in the country as although the app currently urges users to try an alternate payments method, the app doesn’t support any other method for purchases in the country. For selling crypto, however, the app does still support instant interbank transfer via IMPS.
Coinbase has partnered with Indian mobile wallet firm MobiKwik to offer UPI payments in the country. While there is nothing specifically prohibiting UPI from being used to buy cryptocurrencies, firms generally want to avoid any confrontation over the issue with regulators, as much as banks remain hesitant to be associated with crypto industry players due to regulatory uncertainty.
Brian Armstrong, co-founder and CEO of Coinbase, who took to stage at the event announced that the company is making “a long-term investment” in India. Armstrong had earlier posted an India-focused blog where he said, “Coinbase Ventures has already invested $150 million (roughly Rs. 1,132 crore) in Indian technology companies in the crypto and Web 3 space. Combined with India’s world-class software talent, we believe that crypto and Web 3 technology can help accelerate India’s economic and financial inclusion goals.”
Meanwhile, the Indian government is taking a cautious approach towards the emerging digital assets sector but is positively not planning to ban the industry. Starting April 1, a 30 percent tax is being deducted from any profits generated via crypto trading in India, alongside a one percent TDS on each crypto transaction. Failing to comply with the new tax norms can land violators in jail for up to seven years.
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