Coinbase has disabled its app’s functionality for the UPI payment mechanism in India, rendering its namesake exchange inaccessible for any buy orders less than four days after introducing the trading business in the world’s second-largest internet market. When users in India try to buy any of the coins offered on the Coinbase app, they are told that the UPI payment option is “temporarily unavailable.” According to users, testing, and the company’s own help website, the app encourages users to try another payment method, although it presently does not allow any other method for purchases in the nation. (Immediate Payment Service is still supported for selling tokens.)
The action comes after the National Payments Corporation of India, the country’s governing agency that administers UPI, made an odd statement hours after Coinbase launched in India earlier this week, saying it was unaware of any crypto exchange utilizing the UPI payment tool. Several weeks ago, Coinbase began testing UPI payments in India. Later that day, Coinbase issued a statement saying it was dedicated to cooperating with the NPCI and other appropriate authorities, and that it was experimenting with different payment options. On Thursday, TechCrunch asked Coinbase if it expected to keep supporting UPI payments as it worked with various authorities. The business did not respond to the inquiry.
The announcement from the payments organization, which is a special section of India’s central bank, clarified why other crypto exchanges in India have struggled to offer UPI, the most common method of online payment in India. Although cryptocurrency is not prohibited in the South Asian market, the Reserve Bank of India maintains that virtual digital assets require more attention. The Reserve Bank of India’s prohibition on cryptocurrency was overturned by India’s Supreme Court over two years ago, but banks, for the most part, continue to support the central bank. According to the NPCI’s announcement, UPI is still a no-go for crypto in India.
The disagreement occurs at a time when India’s new regulation imposing a 30% tax on crypto revenue has taken effect. On the one hand, India appears to be endorsing cryptocurrency, yet the country’s financial institutions are still playing hard to get. Coinbase’s debut in India earlier this week aimed to consolidate the company’s foothold in the country, where it employs approximately 300 employees and is a major investor in a number of local crypto businesses, including CoinSwitch Kuber and CoinDCX, the two main local exchanges.
Coinbase’s co-founder and CEO, Brian Armstrong, said earlier this week that the company is placing a long-term bet on India, with plans to more than increase its staff there to 1,000 this year. FTX, a much younger crypto exchange that is quickly becoming a key competitor to Coinbase, has begun to extend its presence in India. According to a person familiar with the situation, the firm’s venture arm is working with a few entrepreneurs in the nation. It’s also in discussions to invest in MPL, an Indian fantasy sports business, according to TechCrunch.
