Coinbase, a cryptocurrency exchange, has announced it will launch full-scale cryptocurrency trading in India using Unified Payments Interface (UPI). The National Payments Corporation of India, which created UPI, announced that the UPI system was not being used by any crypto exchanges just moments later.
Coinbase Launches In India, Hit with UPI Problem
Coinbase, a cryptocurrency exchange listed on the Nasdaq, announced Thursday that its trading platform would be available to Indian retail traders at an event held in Bengaluru.
According to the company, customers will be able buy cryptocurrency on Coinbase via the Unified Payments Interface. (UPI), India’s most popular payment method. Coinbase started testing UPI payments just a few weeks back. The company didn’t reveal the names of its bank partners for UPI payments.
UPI, an instant real time payment system that was developed by the National Payments Corporation of India(NPCI), accounts to 60% of retail payment traffic. India’s central bank, The Reserve Bank of India (RBI), and Indian Banks’ Association are the initiators of the NPCI. They also oversee the operation of India’s retail payments and settlements systems.
The NCPI released a statement shortly after Coinbase’s announcement stating that it was unaware of any cryptocurrency exchanges using the UPI payment method. The NPCI wrote the following:
National Payments Corporation of India, in response to recent media reports about the purchase of cryptocurrency using UPI, would like to clarify that there is no crypto exchange using UPI.
The NPCI stated that it would not ban cryptocurrency transactions on the UPI system. It advised banks to decide whether or not to allow UPI through their platforms. Most Indian banks are not willing to cooperate with crypto exchanges.
Indian authorities are currently working on a crypto policy. It is taxing cryptocurrency income at 30%, with no loss offsets and no deductions. The new tax rules came into effect on April 1. Since then, cryptocurrency trading volumes have increased in India. Significantly decreased . On July 1, a Source tax is deducted at 1% Crypto transactions will be subject to (TDS).
While speaking at the event, Brian Armstrong, Coinbase’s CEO, acknowledged India’s regulatory challenges. We know that it won’t be an easy task to bring this technology to India. He stressed that we don’t know how the technology will evolve.
We are committed to working alongside bank partners, regulators and, most importantly, Indians because they have shown an interest in cryptocurrency and a desire to access some of these products and services.
“We are aware that the NPCI has published a statement regarding UPI use by cryptocurrency exchanges. Coinbase stated Thursday that it is committed to working closely with NPCI, and other relevant authorities, to ensure that we align with industry norms and local expectations.”
Armstrong, who is a web developer, announced Monday his plan to India. It focuses on Web3 and crypto. This plan includes the hiring of over 1,000 people to work at Coinbase’s Indian hub. The company, which is listed on Nasdaq, is an investor in two Indian crypto exchanges: Coinswitch Kuber (and Coindcx).
