Due to pressure from local payment regulators, America’s largest exchange has stopped several payment services on its recently opened Indian exchange.

Coinbase, the world’s largest crypto exchange, has stopped accepting payments through the United Payments Interface (UPI) on its platform for Indian users just three days after launching in the South Asian peninsula.

The National Payment Corporation of India (NPCI) manages the UPI payment system, supporting buy orders on Coinbase’s India services. For Indian consumers, the exchange has changed its payment method information on its website, advising them to use Immediate Payment Service (IMP) to place sell orders. After a weekend purchase, the Luna Foundation Treasury now has over 40,000 BTC.

The Reserve Bank of India (RBI) has a separate branch under the Ministry of Finance called the National Payments Corporation of India (NPCI).

Coinbase told Business Standard on April 11 that it would work with the proper regulators to correct the problem in India and that it was “committed to working with NPCI and other relevant authorities to ensure that we are aligned with local expectations and industry norms.”

“With reference to some media reports around the purchase of Cryptocurrencies using UPI, National Payments Corporation of India would like to clarify that we are not aware of any crypto exchange using UPI.”

Even after Coinbase announced the launch of its services, the NPCI stated on April 7 that it did not recognize the legal standing of any crypto exchanges using the RBI’s United Payments Interface (UPI). This remark may have been the catalyst for the suspension:

The sudden stoppage of Coinbase service does not appear to be bothering Indian Coinbase users. “This is not new, Indian exchanges have also been having payment service problems since 2018,” Aditya Singh, co-founder of the Crypto India YouTube channel, tweeted to his 210,000 followers on April 11.

Indian crypto traders are probably used to trading service accessibility being unstable at this stage. The Indian government had failed to develop an appropriate regulatory framework for cryptocurrency, as market participants had witnessed multiple times since last year when it appeared that crypto might be banned in India.

Some Indian officials, such as T. Rabi Sankar, the Reserve Bank of India’s deputy governor, urge a complete ban. However, no such prohibition has yet been enforced, as the country enacted a 30% tax on crypto trading on March 31, which is identical to its gaming tax.

Last month, Coinbase Ventures, the company’s investment arm, announced plans to spend $1 million in the Indian crypto and Web3 industries. The exchange’s service suspension does not appear to have impacted those plans yet.


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