Coinbase is preparing to re-enter the Indian market after halting operations over a year ago, as India reassesses its cryptocurrency policies.
Reengages with Indian Regulators
The largest US crypto exchange is in discussions with Indiaโs Financial Intelligence Unit (FIU), a government agency overseeing financial transactions, as part of efforts to comply with local regulations, TechCrunch reported on Thursday, citing sources familiar with the matter.
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The move comes after a troubled Coinbaseโs history with Indian governmental authorities.
The exchange launched operations in 2022, supporting the widely used Unified Payments Interface (UPI), but was forced to suspend services within days after Indiaโs National Payments Corporation declined to acknowledge its presence.
CEO Brian Armstrong later disclosed that the exchange faced “informal pressure” from the Reserve Bank of India, complicating its ability to operate.
Strict Regulations Stifle Crypto Growth in India
India has been reassessing its cryptocurrency policies in response to global regulatory shifts and recent US actions. However, the market remains challenging for crypto firms due to strict regulations.
Since 2022, the Indian government has imposed a 30% tax on crypto gains and a 1% transaction levy, discouraging trading activity.
The FIU has also cracked down on unregistered exchanges, initially deeming platforms like Binance and Kraken non-compliant before they secured proper registration.
Regulatory uncertainty has led many companies to refrain from investing in virtual asset firms.
Thus, despite a population of 1.4 billion, the countryโs crypto market remains relatively small.
Why This Matters
Coinbaseโs interest in India aligns with its broader international expansion strategy. The U.S. crypto giant also recently secured a license to operate in Argentina, signaling its commitment to global growth.
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