Coinbase (Image: AP)
US crypto exchange Coinbase said on April 8 that it is committed to working with the National Payments Corporation of India (NPCI) which manages and operates the widely adopted Unified Payments Interface (UPI).
The statement comes a day after Coinbase announced at an event in Bengaluru that it had commenced retail crypto trading in India and would allow users to purchase crypto via UPI, a widely-adopted payment mode that accounts for over 60 percent of retail transactions in the country. The event was attended by CEO Brian Armstrong and other senior company executives.
In response to the announcement, NPCI issued a clarification saying that “we are not aware of any crypto exchange using UPI”. Industry sources also told Moneycontrol that NPCI’s stance is that UPI does not support crypto purchases.
“We are aware of the recent statement published by NPCI regarding the use of UPI by cryptocurrency exchanges. We are committed to working with NPCI and other relevant authorities to ensure we are aligned with local expectations and industry norms,” Nasdaq-listed Coinbase said in a statement.
“As we enter the Indian market, we are actively experimenting with a number of payment methods and partners to enable our customers to seamlessly make their crypto purchases. One of these methods is UPI, a simple to use and rapid payment system,” it added.
Coinbase has invested $150 million in Indian startups through its investment arm Coinbase Ventures. It is invested in the only two unicorn crypto exchanges in India—CoinSwitch and CoinDCX.
With the launch of its retail trading platform, Coinbase will be going up against the two startups.
The company also said on April 7 it planned to increase its 300-employee count by 1,000 in 2022.
“Coinbase is proud to be hiring and investing in India, and to exploring ways to bring the potential of the cryptoeconomy to India. India has a rich tradition of innovation and the burgeoning crypto ecosystem and adoption of the technology is a great example of this,” it said.
The announcement has come close on the heels of a hefty 30 percent tax imposed by the government on gains from Virtual Digital Assets (VDAs), including crypto. Exchanges in the country have witnessed a drop in volumes in the days after April 1, when the tax came into effect.
The industry is bracing for another blow with the 1 percent TDS, which is likely to further disincentivise traders and middlemen and may force many Indians to exit the crypto market.
At a media briefing post its announcement on April 7, Coinbase’s Chief Product Officer Surojit Chatterjee said the company was looking at its presence in the country with a long term view of 10-20 years despite the heavy taxation.
The company had engaged with the government at various levels, he said, without revealing the nature of the discussions.
“Crypto is complex. It takes a number of conversations, to educate, to understand the implications, and how the technology can benefit India. That’s the important point. And we have to be engaged in those conversations,” he said.