Crypto giant Coinbase has suspended support for the UPI payment instrument on its app in India, rendering its eponymous exchange rendered non-functional for all purchase orders less than four days after the launch of the trading service on the world’s second-largest internet market. .
Users in India attempting to purchase a token listed on the Coinbase app will be informed that the UPI payment method is “currently unavailable”. The app urges users to try another payment method, but currently, according to several users, it does not support any other method of purchase in the country. (It will continue to support instant 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 the launch of Coinbase in India that it was unaware of any crypto exchanges offering a UPI payment instrument used. Coinbase started testing UPI payments in India a few weeks ago.
In a statement later that day, Coinbase said it was committed to partnering with NPCI and other relevant authorities and said it was experimenting with other payment methods. TechCrunch had asked Coinbase on Thursday whether it planned to continue supporting UPI payments while it held talks with various authorities. The company did not answer the question.
The statement from the payment agency, a special division of the Indian central bank, underlined why other crypto exchanges in India have had problems 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 insist that virtual digital assets need more attention. India’s Supreme Court overturned the Reserve Bank of India’s ban on crypto more than two years ago, but banks generally continue to side with the central bank. The NPCI statement seemed to suggest that UPI is still a no-go for crypto in India.
The scuffle comes at a time when India’s new rule for taxing crypto income at 30% has come into effect. On the one hand, India seems to be giving crypto legitimacy, but the country’s financial institutions are still playing hard to get.
Coinbase’s arrival in India earlier this week was intended to bolster its presence in the country, where it employs approximately 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 the company is making a long-term bet on India and plans to more than triple its workforce in the country to 1,000 this year.
FTX, a much younger crypto exchange and increasingly a major rival to Coinbase, has also started expanding its presence in India. The venture arm of the company is partnering with a handful of startups in the country, according to a source familiar with the matter. It is also in talks to support Indian fantasy sports startup MPL, TechCrunch reported last week.