After a hiatus of more than two years, leading cryptocurrency exchange Coinbase has officially reopened its app for user registration in India. While users can currently engage in crypto-to-crypto trades, the company has ambitious plans to introduce a fiat on-ramp by 2026, enabling Indian users to deposit local currency and purchase cryptocurrencies directly, as announced by John O'Loghlen, Coinbase's APAC director, at India Blockchain Week (IBW).
Coinbase's journey in the Indian market has been fraught with challenges. The exchange initially launched its services in India in 2022 but was forced to suspend support for the Unified Payments Interface (UPI) payment network within days. This swift reversal followed the National Payments Corporation of India (NPCI), the operator of UPI, refusing to acknowledge Coinbase's presence in the country. By 2023, Coinbase had ceased all operations for Indian users, instructing them to offload their accounts entirely.
"We had millions of customers in India, historically, and we took a very clear stance to off-board those customers entirely from overseas entities where they were domiciled and regulated," O'Loghlen explained. "We wanted to kind of burn the boats, have a clean slate here. As a commercial business person wanting to make money and active users, that's like the worst thing you can do, so it wasn't without some hesitation."
To facilitate its re-entry, Coinbase engaged with India's Financial Intelligence Unit (FIU), a government agency overseeing transactions and fraud, and successfully registered with them this year. Following an early access program in October, the app is now open to all users, marking a cautious yet determined return to the world's second-largest online user base.
Navigating India's Crypto Regulatory Landscape
While many internet companies, including social platforms and AI firms like OpenAI, have found rapid growth in India, cryptocurrency companies face a particularly stringent regulatory environment. India imposes a significant 30% tax on crypto income without any provision for loss offsets, alongside a 1% tax deduction at source (TDS) on each transaction. These measures can significantly discourage frequent trading and investment in digital assets.
O'Loghlen expressed hope that the Indian government would consider relaxing these taxation policies to make digital asset ownership less burdensome for the populace. Despite these considerable challenges, Coinbase remains optimistic about its long-term prospects in India.
Commitment and Future Vision
Coinbase's commitment to the Indian market is evident through its strategic investments and expansion plans. The company's venture arm recently increased its investment in local exchange CoinDCX, valuing it at $2.45 billion. Furthermore, Coinbase plans to expand its existing team of over 500 employees in India by hiring for various roles focused on both local and global market initiatives.
"We want to be known as that trusted exchange, ensuring your funds are safe with us," O'Loghlen stated. "We're not going to reach the masses if we can't offer a really nice UI and a trusted experience that allows you to onboard in a matter of minutes, just like you would with Zepto, Flipkart, or any other super app in India."
