Coinbase Aims to Re-Enter India After Over a Year Away from the Market: Report

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Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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Coinbase

Coinbase is planning to re-enter India, potentially returning to one of the world’s largest markets after more than a year away.

The US crypto exchange is engaging with several Indian authorities, including the Financial Intelligence Unit (FIU), TechCrunch reported on Friday, citing sources.

A Coinbase spokesperson didn’t return Cryptonews’ request for comment by press time.

Coinbase Earlier Scaled Back India Operations Over Central Bank Pressure

Coinbase launched services in India in April 2022. It soon encountered regulatory hurdles that disrupted operations. Just days after launching, the company suspended UPI (Unified Payments Interface) payments. This action came after “informal pressure” from the RBI during a broader crackdown on cryptocurrencies.

This led to Coinbase halting its trading services in India soon after. By June 2022, Coinbase stopped accepting new user registrations for its Indian exchange.

Although it officially terminated services for Indian users on Sept. 25, 2023, Coinbase later explained that this measure targeted accounts not meeting new standards rather than signaling a full exit from the market.

FIU Targeted Offshore Exchanges

The Reserve Bank of India (RBI) has long voiced skepticism about cryptocurrencies, raising concerns over macroeconomic risks, money laundering and financial stability.

In 2023, the FIU issued notices to several offshore exchanges—including Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex—for failing to comply with India’s anti-money laundering laws under the Prevention of Money Laundering Act (PMLA).

Consequently, these exchanges experienced URL blockings and were removed from app stores like Apple’s App Store and Google Play. However, some exchanges, such as Binance and Kucoin, managed to resume operations after registering with the FIU and paying fines, even though the regulatory environment remains stringent.

High tax rates, including a 30% capital gains tax and a 1% TDS on transactions, have driven many Indian traders to offshore platforms, significantly reducing domestic trading volumes.

Conversely, the Securities Exchange Board of India has proposed multi-regulatory oversight for cryptocurrencies, signaling a potential shift in policy.

Meanwhile, Coinbase is pursuing international expansion, recently saying it is committed to onboarding the next billion users into the crypto economy. Earlier this month, the company announced that it secured its Virtual Asset Service Provider (VASP) registration in the UK, further strengthening its market position.

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