Crypto giant Coinbase has suspended support for UPI payments instrument on its app in India, making its eponymous exchange nonfunctional again for any purchase orders less than four days after launching the trading service in the world’s second-largest internet market.
Users in India attempting to purchase any token listed on the Coinbase app are being informed that the UPI payment method is “currently unavailable.” The app urges users to try another payment method, but it currently doesn’t support any other method for purchases in the country, according to users, tests, and the company’s own support page. (It continues to support Immediate Payment Service 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’s India launch earlier this week that it was not aware of any crypto exchange using UPI payments instrument. Coinbase began testing UPI payments in India several weeks ago.
A Coinbase executive talking about UPI payments in India at the company’s maiden Thursday event. Image Credits: Coinbase
In a statement later that day, Coinbase said it was committed to working with NPCI and other relevant authorities and said it was experimenting with other payments methods. TechCrunch had asked Coinbase on Thursday if it planned to continue to support UPI payments while it engaged with various authorities. The company did not respond to the question.
The statement from the payments body, a special division of India’s central bank, underscored why other crypto exchanges in India have had troubles with supporting 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 need more scrutiny. India’s Supreme Court overturned the Reserve Bank of India’s ban on crypto over two years ago, but banks, by and large, continue to side with the central bank. The NPCI’s statement appeared to suggest that UPI is still a no-go for crypto in India.
The scuffle comes at a time when India’s new rule on taxing crypto income at 30% has gone into effect. On one hand, India is appearing to give crypto legitimacy, but the financial institutions in the country are still playing hard to get.
Coinbase’s arrival in India earlier this week sought to solidify its presence in the country, where it employs about 300 people and is an active investor in many local crypto startups, including the two leading local exchanges, CoinSwitch Kuber and CoinDCX.
Brian Armstrong, co-founder and chief executive of Coinbase, said earlier this week the firm was making a long-term bet on India and planned to more than triple its headcount in the country to 1,000 this year.
FTX, a much younger crypto exchange and increasingly a major rival of Coinbase, has also started to expand its presence in India. The firm’s venture arm is engaging with a handful of startups in the country, according to a source familiar with the matter. It is also in talks to back the Indian fantasy sports startup MPL, TechCrunch reported last week.