Coinbase (COIN), the most popular crypto exchange in the United States, has big ambitions.
These ambitions are focused on conquering new lands, which would allow the crypto exchange to expand its audience and also increase its revenue and profits at a time when crypto trading volume is slowing in the United States.
One of the cornerstones of this international expansion is India, a country of 1.38 billion people.
“Namaste India! 🇮🇳,” CEO Brian Armstrong solemnly announced in a blog post on April 4. He accompanied the message with the national flag.
“India has built a robust identity and digital payments infrastructure and implemented it quickly and swiftly. Combined with India’s world-class software talent, we believe crypto and Web3 technology can help accelerate India’s goals for economic and financial integration,” Armstrong wrote, announcing that he has toured the country.
Sudden stop
He added that Coinbase will host a crypto community event in Bangalore on April 7 to discuss the future of crypto and Web3 in India.
“This week I will be joining members of our leadership team as we meet with students from top universities, crypto founders, Indian entrepreneurs and crypto evangelists,” the entrepreneur said.
“India is a magical place and I believe crypto has a bright future here. We are excited to help build that future and this event is an important step,” he concluded.
A few days later, on April 7, Coinbase announced that crypto investors could now use the country’s online payment system to send funds to the platform. This system is known as United Payments Interface or UPI and is a government regulated payment system.
It is operated by one entity, the National Payments Corporation of India, which is part of the country’s central bank.
But three days after the announcement, Coinbase suspended the transmission of rupees, the national currency, to its trading app. The company did not give a reason for this abrupt stop, but it could be that the reason is that the authorities were not aware of Coinbase’s projects.
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“Referring to some recent media reports of buying cryptocurrencies using UPI, the National Payments Corporation of India would like to clarify that we are not aware of any crypto exchanges using UPI,” NPCI posted on Twitter.
Crypto Investors Affected
The impact is colossal as Coinbase customers are now unable to fund their accounts with rupees.
“As of April 10, purchases are currently disabled due to an ongoing issue we have with the UPI system,” Coinbase said on its Indian website. “We are working hard to resolve the issue and we encourage you to periodically check your account to see if the issue is resolved.”
It continued: “Note that we do not currently support any other payment method to purchase crypto. Thank you for your patience and understanding.”
Coinbase did not immediately respond to a request for comment.
The Coinbase mishap illustrates the travails of the crypto sphere in India, where lawmakers passed a 30 percent tax on cryptocurrency profits last month. The legislature treats crypto as the maximum taxed profit from gambling.
Another tax on all crypto transactions over a certain amount is set to come into effect on July 1.
According to data and research firm Chainalysis, India is one of the countries where crypto adoption is most widespread, along with Vietnam.
“It is estimated that over 100 million people, 7.30% of the total population of India, currently own cryptocurrency,” said TripleA, a Singapore-based crypto fintech, in a recent report.
“The daily average trading volume of various cryptocurrencies increased by up to 500 percent in the period from March 2020 to February 2021. (2) Many are open to the idea of ​​crypto as they explore alternative ways to store their wealth,” the report said.
It added: “Indian workers, including software developers, content creators and those who work with global companies, are reportedly choosing to be increasingly paid in cryptocurrency over traditional money as it is easier to transfer across borders , and lower transaction costs compared to bank transfers.”