- Coinbase seeks the approval of FUI to return back to India’s crypto market.
- The exchange halted Indian operations in 2022 due to the pressure of India’s RBI.
- Coinbase’s re-entry aligns with its expansion and compliance push across the globe.
Coinbase is preparing to re-enter the Indian market, engaging with key regulatory bodies including the Financial Intelligence Unit (FIU). The report from TechCrunch comes more than a year after ceasing its operations in the country. The American crypto exchange’s strategic move follows Binance’s successful return to India in August 2024 after completing FIU registration.
The exchange’s previous venture into India ended quickly in 2022 when its UPI payment integration lasted only three days. Coinbase CEO Brian Armstrong later revealed that “informal pressure” from the Reserve Bank of India (RBI) had forced the trading halt. While cryptocurrency trading remains legal in India, banks largely avoid servicing virtual asset firms to maintain positive relations with the central bank.
The timing of Coinbase’s return hinges on securing necessary approvals, particularly the FIU license. This regulatory body previously declared several exchanges, including Kraken and Binance, were operating illegally in India. However, many have since complied with FIU’s disclosure requirements regarding user activities.
The renewed interest in India aligns with Coinbase’s broader international expansion strategy, as mentioned by CFO Alesia Haas at a recent Goldman Sachs conference. Supporting this direction, Coinbase’s Chief Legal Officer Paul Grewal has joined the U.S.-India Business Council board of directors, highlighting India’s growing importance in the web3 ecosystem. Grewal noted that India’s share of global web3 developers has quadrupled to 12% since 2018, leading emerging markets.
Related: Binance Plans to Delist Margin Trading Pairs on February 17
The Indian crypto market presents different challenges, including a 30% tax on crypto income and a 1% transaction deduction implemented in 2022. However, recent developments, including the collapse of the Indian exchange WazirX following a reserve loss, have created market opportunities. Currently, CoinSwitch and CoinDCX, both Coinbase-backed exchanges, lead the Indian crypto market.
A Coinbase spokesperson expressed optimism about Indian market opportunities while emphasizing their commitment to regulatory compliance. However, the success of their re-entry will largely depend on handling the tough regulatory landscape and securing necessary approvals from Indian authorities.
This potential comeback occurs as India’s crypto ecosystem continues to change, with increased regulatory oversight and growing institutional interest in blockchain technology. The move in India’s cryptocurrency market could set new standards for international exchange operations in the region.
