The National Payments Corporation of India, the governing body that oversees UPI in the country, said in a statement that it is not aware of any cryptocurrency exchange using UPI payments instrument, hours after the global giant Coinbase launched its trading service in the country with UPI support.
The voluntary statement from the payments body, a special division of India’s central bank, underscores why other crypto exchanges in India have had troubles with supporting UPI on their platforms. 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 appears to suggest that UPI is still a no-go for crypto in India.
At its maiden India event in Bengaluru earlier on Thursday — which was attended by several top execs including Coinbase chief executive Brian Armstrong — the global giant announced that it is launching crypto trading service in the country. The company’s eponymous app, the executives said, will allow users to buy cryptocurrencies with UPI, the most popular way Indians transact online.
Coinbase — an investor in Indian crypto exchanges CoinSwitch Kuber and CoinDCX — did not identify the banking/fintech partners it is working with in India, but in a statement to TechCrunch said the company is committed to working with NPCI and that the support for UPI — the sole payments method a top company executive spoke about and demonstrated at the event today — is only one of the instruments it is experimenting with.
“Coinbase is proud to be hiring and investing in India, and to exploring ways to bring the potential of the cryptoeconomy to India. India has a rich tradition of innovation and the burgeoning crypto ecosystem and adoption of the technology is a great example of this. As we enter the Indian market, we are actively experimenting with a number of payment methods and partners to enable our customers to seamlessly make their crypto purchases,” a company spokesperson said.
“One of these methods is UPI, a simple to use and rapid payment system. We are aware of the recent statement published by NPCI regarding the use of UPI by cryptocurrency exchanges. We are committed to working with NPCI and other relevant authorities to ensure we are aligned with local expectations and industry norms.”
A company spokesperson did not immediately answer whether Coinbase plans to continue to offer support for UPI in the country while it sorts out the matter with NPCI.
The story was updated with Coinbase’s statement.