Coinbase, a leading cryptocurrency exchange based in the U.S., is gearing up to make a comeback in the Indian market after a hiatus of nearly two years. The company is in talks with Indian firms to introduce UPI-linked services, a move that could significantly boost its presence in the country.
The journey for Coinbase in India has not been smooth sailing in the past. In 2022, the company attempted to launch UPI payments for crypto transactions but ran into roadblocks. The National Payment Corporation of India (NPCI) intervened, citing lack of permission for integrating UPI with crypto transactions, leading to the suspension of services shortly after the launch. Subsequently, Coinbase faced informal pressure from the Reserve Bank of India (RBI) and eventually exited the Indian market in 2023, advising customers to withdraw their funds.
As Coinbase gears up for its re-entry, regulatory compliance is a key focus area. The company must register with India’s Financial Intelligence Unit (FIU), a process that could take several months and extend until the end of the year. To ensure a smooth re-launch, Coinbase is strategically partnering with local crypto firms, enhancing KYC verification processes, and ensuring compliance with regulations to avoid past pitfalls.
However, Coinbase will have to navigate a competitive landscape in India, with established platforms like CoinSwitch and CoinDCX already holding strong positions in the market. To stand out and succeed, Coinbase will need a robust market strategy that sets it apart from the competition and resonates with Indian users.
The Indian cryptocurrency market has recently been rocked by a $230 million hack at Wazirx, the largest crypto exchange in the country. The platform has been temporarily shut down, leaving investors waiting for updates on when they can expect to retrieve their funds.
As Coinbase prepares to re-enter the Indian market, it will need to address these challenges head-on, leveraging its expertise and experience to carve out a niche in the competitive landscape and win over Indian users with its innovative services and offerings.