The largest US-based cryptocurrency exchange, Coinbase, has announced the reopening of its app for registration in India. This move comes in after the crypto exchange halted its services in the country for more than two years.
This reentry follows the company’s registration this year with the Financial Intelligence Unit, India (FIU), thereby ensuring compliance with the country’s anti-money laundering (AML) regulations.
Meanwhile, apart from reopening in India, John O’Loghlen, the director for Coinbase in the Asia-Pacific region, hinted at the firm’s plans to launch a fiat on-ramp next year during India Blockchain Week (IBW). He further explained that the exchange had adopted the idea of introducing a fiat on-ramp to enable users based in India to deposit their funds and purchase cryptocurrency effectively.
Coinbase Halts All Its Activities in India
Regarding Coinbase’s earlier decision to halt its services in India, reports noted that the cryptocurrency exchange had introduced its services in the country back in 2022. After careful consideration, it had to swiftly suspend its efforts to support the Unified Payments Interface (UPI) payment system. This decision came after UPI operator National Payments Corporation (NPCI) refused to recognize the exchange’s operations in India.
Following this denial, Coinbase was left with no other choice but to stop all its activities in the country later in 2023. Afterwards, the crypto exchange instructed its users based in India to close their accounts.
“We previously had millions of customers in India, and we decided to completely remove those customers from overseas entities where they were based and regulated. We wanted a fresh start here,” O’Loghlen explained.
He further acknowledged that the decision they adopted was not easy for Coinbase, being a company concentrating on generating more income and gaining more active users.
After it ceased all its operations in India, the company partnered with the Financial Intelligence Unit, a national government agency responsible for collecting, analyzing, and disseminating information on suspicious financial activities. Coinbase successfully registered with the agency this year. Initially, it granted its users access to the app in October. Now, the exchange has made it available to everyone.
Coinbase’s reopening in India marks a growing trend among several internet firms that are developing new markets in India. Several analysts weighed in on this trend. They noted that these companies aim to reach the second-largest group of online users worldwide.
In the meantime, sources have warned that while AI companies, such as OpenAI, and social media platforms are experiencing rapid growth in this market, cryptocurrency firms are encountering significant challenges due to the strict regulations being implemented and tax hikes on digital currencies.
Coinbase Raises Concerns About India’s Tax Imposed on Crypto Earnings
In India, crypto earnings are subject to a 30% tax, inclusive of any losses encountered. The country also imposes a 1% tax on every transaction.
Analysts cautioned that such factors may deter individuals from engaging in frequent trading. As Coinbase fully reopens in the country, O’Loghlen stated that the crypto exchange is optimistic that the government will soon reduce these tax burdens, making it easier for individuals to own digital assets.
Meanwhile, despite these obstacles, the firm stated that it has a bullish outlook for its expectations in India. Coinbase also mentioned that its investment branch invested more funds into CoinDCX, the top crypto trading app in the country. This crypto trading app is now valued at $2.45 billion following its funding round.
To further demonstrate its commitment to solidifying its position as a leader in the crypto industry, the crypto exchange publicly highlighted its intention to grow its workforce, which comprises more than 500 workers in India, by hiring for various positions targeted at both local and international markets.
“I think we want to be recognized as a trusted exchange that keeps your money safe,” O’Loghlen stated. “We can’t reach a wide audience if we don’t provide an easy-to-use interface and a reliable experience that lets you sign up within minutes, just like you would with Zepto, Flipkart, or any other popular app in India.”