Key Notes

Key Notes:

Coinbase is actively engaging with Indian authorities, including the Financial Intelligence Unit (FIU), for regulatory approval after its 2022 exit.Binance’s successful re-entry in August 2023 set a precedent, as it resumed operations after complying with FIU regulations.Despite India’s lack of formal crypto regulations, Coinbase sees potential in its massive user base and evolving global policies.

Coinbase is gearing up for a second shot at the Indian market after pulling out more than a year ago. The American crypto exchange is actively engaging with Indian authorities, including the Financial Intelligence Unit (FIU), to secure the necessary approvals for its re-entry, according to a TechCrunch report on Thursday.

India’s stance on cryptocurrencies has been evolving, largely due to global regulatory shifts and recent policy changes in the US. The government has yet to introduce a formal regulatory framework for virtual assets, leaving exchanges in a gray area. While crypto trading isn’t illegal in India, financial institutions remain hesitant to deal with exchanges, fearing backlash from the Reserve Bank of India (RBI).

Coinbase’s return follows Binance’s successful re-entry last August. Binance, the world’s largest crypto exchange, resumed operations in India after registering with the FIU, ending a seven-month regulatory standoff. That move set a precedent for global exchanges looking to operate in the country.

Coinbase’s last attempt to break into India ended abruptly in 2022. The company launched services in April of that year with support for the country’s widely used Unified Payments Interface (UPI) system. However, within just three days, operations came to a screeching halt after the National Payments Corporation of India (NPCI), which oversees UPI, refused to acknowledge the exchange’s existence.

The setback was more than just a regulatory hiccup. Coinbase CEO Brian Armstrong later revealed that the company faced “informal pressure” from the RBI, which forced them to shut down trading. The central bank’s cautious stance on crypto has long been a roadblock for foreign exchanges, with local banks often refusing to work with digital asset firms to avoid regulatory scrutiny.

Coinbase CEO says Coinbase halted trading service in India because of “informal pressure” from RBI.The Reserve Bank of India’s action “may be actually in violation of the Supreme Court ruling, which would be interesting to find out if it were to go there” he said

Coinbase is now waiting for approval from the FIU, which previously ruled that several exchanges, including Binance and Kraken, were operating “illegally” in India. Many of those firms have since complied with FIU’s disclosure requirements, paving the way for their return.

Coinbase’s focus on international expansion has been evident in recent months. At a Goldman Sachs conference, CFO Alesia Haas emphasized the company’s intent to tap into emerging markets. India, despite its regulatory hurdles, remains an attractive destination due to its massive crypto user base.

A company spokesperson confirmed Coinbase’s commitment to following India’s regulatory requirements, stating, “Coinbase is excited by the opportunities in the Indian market and intends to comply with applicable regulatory requirements.” However, no further details were shared regarding the FIU registration process or a specific timeline for relaunch.

Meanwhile, India continues to delay a comprehensive crypto regulation bill despite discussing the issue for nearly six years. While the government enforces strict taxation, it offers no investor protection against scams or fraud. The WazirX collapse, along with several high-profile security breaches, has left Indian traders frustrated with the lack of official intervention.

Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.

With over 3 years of crypto writing experience, Bena strives to make crypto, blockchain, Web3, and fintech accessible to all. Beyond cryptocurrencies, Bena also enjoys reading books in her spare time.

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