Coinbase Positive About India Returns, But Will Central Banks Soften Crypto Position?


Coinbase’s Chief Executive Officer Brian Armstrong said in its first quarter earnings report that the decision to close its business in India was driven by “unofficial pressure” from the central bank of India.

In April, just three days after the launch of Coinbase India, the domestic subsidiary of the global exchange stopped supporting the Unified Payment Interface (UPI) on the platform.

Chief Executive Officer Brian Armstrong said, “After a few days of launch, the UPI was deactivated due to unofficial pressure from the Central Bank of India.

Coinbase Expansion Plan

UPI is an instant banking facility for real-time money transfers from the National Payments Corporation of India (NPCI). Neither NPCI nor the RBI have issued official recommendations on the use of payment mechanisms for crypto transactions, but regulators have refrained from extending support to the Indian domain.

NPCI said in April that it “didn’t know about cryptocurrency exchanges” that use an out-of-the-box payment system, despite Coinbase launching to enable UPI options in India.

Armstrong’s statement also reaffirms RBI’s firm stance on crypto assets. In the past, Governor Shaktikanta Das has raised potential risks in the crypto sector for greater stability for investors and the financial sector.

So, even though top banks put aside a cryptocurrency ban imposed by the RBI in 2018, it appears that watchdogs have kept the sector “no shadow” since then. Armstrong previously questioned whether this informal ban would violate the 2020 court ruling mentioned above.

Armstrong degree commented“India is a unique market in that the Supreme Court has ruled that cryptocurrencies cannot be banned, but there are elements within the government, including the Central Bank of India, that seem not to be the case. positive”

But despite the regulatory upheaval, Armstrong hopes to make a comeback, according to management, ‘even if they aren’t sure exactly how it will be received.’ He added, “I hope to live in India again in a relatively short period of time and expand overseas like other countries.”

Cryptocurrency slump combined with legislative obstacles

Armstrong also said in a previous blog post, “We have ambitious plans for India and we want to hire more than 1,000 people from our India hub this year alone.”

However, the legislative cryptocurrency mood in India is positive. The state imposes a heavy tax on the virtual asset class when compared to traditional investment options. Also, mainstream banks have moved away from offering financial services to cryptocurrency traders.

And when it comes to Coinbase, the stock is currently hovering around $53, down more than 85% from its April 2021 opening.

Coinbase (COIN) Chart on TradingView

In addition to the poor first-quarter earnings, the exchange also warned that second-quarter trading volume will decline. According to the company’s Q1 earnings report, only 24% of platform trading volume came from retail customers.

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