Coinbase, the largest crypto exchange in the United States, has stopped accepting payments through the United Payments Interface (UPI) on its website for Indian consumers just three days after launching in the subcontinent.
The National Payment Corporation of India (NPCI) manages the UPI payment system, which supports buy orders on Coinbase’s India services.
For Indian consumers, the exchange has changed its payment method information on its website, advising them to use Immediate Payment Service (IMP) to make sell orders.
The Reserve Bank of India (RBI) has a separate branch under the Ministry of Finance called the National Payments Corporation of India (NPCI).
Did Coinbase enter the Indian market at the wrong time?
The world’s largest crypto exchange, which announced its debut in India with a big-bang event in Bengaluru on April 7, came under fire from the National Payments Corporation of India (NPCI).
The NPCI supervises UPI, and the company has stated that customers will be able to buy cryptocurrencies via UPI. Coinbase contacted the NPCI after the UPI operator said that it “is not aware of any crypto exchange using UPI,” according to an industry source.
After the explanation, Coinbase contacted NPCI. However, it is irrelevant because crypto is plainly not legal in India.
According to reports, following the NPCI’s explanation, banks were left with little choice except to close accounts that facilitated crypto-related payments.
Other Indian crypto exchanges, on the other hand, continue to accept UPI-based transactions through their applications.
The Reserve Bank of India has expressed worries about cryptocurrency and has suggested that it should be outlawed in many situations.
As a result, aggregators and banks have been advised not to engage with crypto exchanges, according to several sources. However, because the business operates in a legal grey area, crypto exchanges have been permitted to continue operating in India.
Mobikwik, a fintech company that facilitated bitcoin purchases through its wallet, has shut down the service due to regulatory uncertainties. Mobikwik was one of India’s most popular e-wallets for crypto transactions.
Meanwhile, while Coinbase’s much-anticipated debut has been marred by controversy, its creator Brian Armstrong has had many meetings in India to advocate for cryptocurrency. During his journey to India, he met with Amitabh Kant, the CEO of the Niti Aayog, to discuss crypto and blockchain technology.