Coinbase, the world’s largest crypto exchange, has stopped accepting payments through the United Payments Interface (UPI) on its website for Indian consumers just three days after launching in the South Asian peninsula.
The National Payment Corporation of India (NPCI) manages the UPI payment system, which supports buy orders on Coinbase’s India services. For Indian consumers, the exchange has changed its payment method information on its website, advising them to use Immediate Payment Service (IMP) to make sell orders.
The Reserve Bank of India (RBI) has a separate branch under the Ministry of Finance called the National Payments Corporation of India (NPCI).
Coinbase told Business Standard on April 11 that it will work with the proper regulators to correct the problem in India, and that it was “committed to working with NPCI and other relevant authorities to ensure that we are aligned with local expectations and industry norms.”
Even after Coinbase announced the launch of its services, the NPCI stated on April 7 that it did not recognize the legal status of any crypto exchanges using the RBI’s United Payments Interface (UPI). This remark may have been the catalyst for the suspension:
In light of recent media stories claiming that cryptocurrencies may be purchased via UPI, the National Payments Corporation of India would like to clarify that it is not aware of any crypto exchanges that use UPI.
The unexpected stoppage of Coinbase service does not appear to be bothering Indian Coinbase users. “This is not new, Indian exchanges have also been having payment service difficulties since 2018,” Aditya Singh, co-founder of the Crypto India YouTube channel, tweeted to his 210,000 followers on April 11.
Coinbase disabled UPI service in India few days after NPCI statement.
This is not new, Indian exchanges have also been facing payment service problem since 2018.
Weird fact – Actual gambling apps get proper payment service support while crypto exchanges are being alienated.
— Aditya Singh (@CryptooAdy) April 10, 2022
Indian crypto traders are probably used to trading service accessibility being unstable at this stage. The Indian government has failed to develop an appropriate regulatory framework for cryptocurrency, as market players have witnessed multiple times since last year when it appeared that crypto might be outlawed in India.
Some Indian authorities, such as T. Rabi Sankar, the Reserve Bank of India’s deputy governor, urge a complete prohibition. However, no such ban has yet been implemented since on March 31, the nation passed a 30% tax on crypto trading, which is identical to its gambling tax.
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Last month, Coinbase Ventures, the company’s investment arm, announced plans to spend $1 million in the Indian crypto and Web3 businesses. The exchange’s service suspension does not appear to have had an impact on those plans yet.