Coinbase has stopped trading in India due to “informal pressure” from the Reserve Bank of India, the crypto exchange’s chief executive said Tuesday, addressing a notable Indian episode for the first time in a month.
Nasdaq listed company launched a crypto trading service of the same name in India with great fanfare last month. The app allowed users of the world’s second largest online marketplace to buy crypto tokens using UPI, a very popular Indian payment infrastructure built by a coalition of retail banks. But just three days after the launch, the firm rolled back the service without any explanation.
The move follows a strange announcement from the National Payments Corporation of India, the governing body that oversees UPI in the country where it refused to confirm UPI support in the Coinbase app.
When asked about the Indian episode, Coinbase co-founder and CEO Brian Armstrong gave a detailed explanation about the company’s earnings on Tuesday evening.
“So, a few days after launch, we shut down UPI due to informal pressure from the Reserve Bank of India,” he said.
Armstrong pointed out that cryptocurrency trading is not illegal in India – in fact, the South Asian country has only recently started taxing it – but there are “elements in the government, including in the Reserve Bank of India, that don’t seem to be as positive on it.” And so they — it’s been called a ‘shadow ban’ in the press, basically they’re exerting gentle pressure behind the scenes to try and cut off some of these payments that might go through UPI,” he said.
The actions of the Reserve Bank of India “may actually be in violation of the Supreme Court ruling, which would be interesting to know if he went there. But I think we prefer to just work with them and focus on the restart. I think there are a number of paths that we need to restart with other payment methods. And this is the default path in the future,” he said.
The Reserve Bank of India previously banned cryptocurrencies – a decision overturned by the country’s supreme court more than two years ago – but the central bank continues to unofficially pressure banks not to participate in cryptocurrency exchanges, TechCrunch previously reported. (For this reason, so many cryptocurrency exchanges in the country periodically experience problems with payments in the country.)
“I think if you zoom out for a minute, one of our theories and my theory is that action produces information. So it’s not always clear when we visit these countries around the world, everyone is in varying degrees of education or lack thereof regarding cryptocurrencies. And there is a lot of work to be done to meet policy makers around the world and educate them about what the possibilities of AML are and what the positive benefits are. Residents of these countries generally really want cryptocurrency. And so to me, it says that in most places in the free world and democracies, cryptocurrency will eventually become regulated and legal, but it will take them time to get used to it,” said Armstrong.
“And the way we move the conversation forward is by taking action. That’s why we’re going to launch, even if we’re not quite sure how it’s going to happen – the response will be received, we’re going to launch, because it forces discussion. Now the press in India is talking about it. Now there are meetings where we will talk about how we can move to the next step. This is our general approach to international expansion.”
Credit: techcrunch.com /