In a major development, leading US-based cryptocurrency exchange Coinbase has decided to leave the Indian market within three days of its launch. Brian Armstrong, the co-founder, and chief executive said because of “informal pressure from the government and the Reserve Bank of India”.
On April 7, Coinbase launched its crypto trading service in India which allowed its clients in the nation to buy crypto via UPI [unified payments interface].
But the platform’s operations were left paralyzed after the National Payments Corporation of India [NPCI], the body that manages UPI, made a bizarre claim that it was “not aware of any crypto exchange using UPI.
“Speaking on last month’s fiasco in the first quarter 2022 earnings call on May 10, Armstrong made a bold statement that the informal pressure from the government and RBI could be in violation of the Supreme Court of India’s ruling, which had overturned the central bank’s ban on cryptocurrency.
“India is a unique market in the sense that the Supreme Court has ruled that they can’t ban crypto, but there are elements in the government there, including at Reserve Bank of India, who don’t seem to be as positive on it,” Coinbase’s CEO said in its speech.
“And so they in the press, it’s been called a shadowban; basically, they’re applying soft pressure behind the scenes to try to disable some of these payments, which might be going through UPI,” he added.
In 2018, the Reserve Bank of India had earlier banned cryptocurrency, a decision overturned by the nation’s apex court over two years ago, but the central bank continues to informally exert pressure on banks from engaging with cryptocurrency exchanges.
Coinbase’s exit is just the beginning of the end?
India’s crypto market is in a dire state as several crypto firms and talents unable to find any alternative routes are exiting India to friendlier shores. TronWeekly previously reported on Indian cryptocurrency exchange WazirX’s co-founders, Nischal Shetty, and Siddharth Menon relocating to Dubai with their families.
In another shocker, India’s GST Council is mulling imposing 28 percent Goods and Services Tax on cryptocurrencies, as per media reports.
According to those reports, the GST Council has formed a committee to look into the proposal of levying 28% GST on all activities and services related to cryptos. The proposal might be tabled before the Council in its next meeting.