Crypto giant Coinbase has suspended support for UPI payment instruments on its app in India, rendering its eponymous exchange once again inoperable for all buy orders, less than four days after launching the trading service on the world’s second-largest internet marketplace.
Users in India attempting to purchase any token listed on the Coinbase app will be informed that the UPI payment method is “currently unavailable”. The app encourages users to try another payment method, but according to users, tests and the company’s own support page, it doesn’t currently support any other method for making purchases in the country. (The Immediate Payment Service is still supported for selling tokens.)
The move follows a strange statement from the National Payments Corporation of India, the governing body that oversees UPI in the country, which said hours after Coinbase launched in India earlier this week that it was not aware of any crypto exchanges using UPI payment instruments. Coinbase started testing UPI payments in India a few weeks ago.
A Coinbase executive speaks about UPI payments in India at the company’s first Thursday event. (Image credit: Coinbase)
In a statement later that day, Coinbase said it was committed to working with NPCI and other relevant authorities and that it was experimenting with other payment methods. TechCrunch asked Coinbase on Thursday if it plans to continue supporting UPI payments while it works with various authorities. The company did not respond to the question.
The statement from the Payments Authority, a special department of India’s central bank, underscored why other crypto exchanges in India were struggling to support UPI, the most popular way Indians transact online.
Crypto is not illegal in the South Asian market, but the Reserve Bank of India continues to maintain that virtual digital assets warrant closer scrutiny. India’s Supreme Court overturned the Reserve Bank of India’s crypto ban over two years ago, but banks by and large continue to side with the central bank. The NPCI statement appeared to indicate that UPI is still a crypto no-go in India.
The scuffle comes as India’s new 30% crypto income tax rule has come into force. On the one hand, India appears to be giving legitimacy to crypto, but financial institutions in the country are still playing hard to get it.
Coinbase’s arrival in India earlier this week aimed to solidify its presence in the country, where it employs about 300 people and is an active investor in many local crypto startups, including two leading local exchanges, CoinSwitch Kuber and CoinDCX.
Coinbase co-founder and chief executive Brian Armstrong said earlier this week the company has a long-term bet on India and plans to more than triple its headcount in the country to 1,000 this year.
FTX, a much younger crypto exchange and increasingly a key rival to Coinbase, has also started expanding its presence in India. According to a source familiar with the matter, the company’s venture arm is working with a handful of startups in the country. It is also in talks to support Indian fantasy sports startup MPL, TechCrunch reported last week.