Coinbase is working on its re-entry to India more than a year after it officially ceased operations in the world’s most populous nation.
The American crypto exchange is engaging with various Indian authorities, including the Financial Intelligence Unit (FIU), an Indian government agency that scrutinizes financial transactions, according to two sources familiar with the matter who requested anonymity as deliberations are ongoing and private.
Coinbase’s work on its comeback follows a tumultuous history in the South Asian market. Binance, the world’s largest cryptocurrency exchange, resumed operations in India last August after registering with the FIU following a seven-month regulatory halt. The move established a precedent for foreign crypto exchanges seeking to operate in India.
Coinbase’s previous attempt to launch services in India ended abruptly in 2022. The exchange launched with much fanfare in April of that year, introducing support for the widely used United Payments Interface (UPI) system. The company had to suspend the service just three days later after India’s National Payments Corporation, which oversees UPI, refused to acknowledge Coinbase’s operations.
Brian Armstrong, Coinbase’s chief executive, later disclosed that the outfit faced “informal pressure” from the Reserve Bank of India, which had led to the trading halt. Though cryptocurrency trading isn’t illegal in India, lenders largely refuse to do business with virtual asset firms in the country to avoid upsetting the central bank, according to many entrepreneurs, investors and other officials.
The timing of Coinbase’s potential relaunch depends on how long it takes to secure necessary approvals, including a license to operate from the FIU. The agency previously ruled that many exchanges, including Kraken and Binance, were “illegally” operating in India. (Many of these firms have since complied with the FIU, which requires broader disclosures on user activities.)
“Coinbase is excited by the opportunities in the Indian market and intends to comply with applicable regulatory requirements,” a company spokesperson told TechCrunch, declining to share any update on the FIU registration.
The crypto exchange’s interest in India comes as it explores broader international expansion, per comments made by Coinbase CFO Alesia Haas at a recent Goldman Sachs conference.
Additionally, Paul Grewal, chief legal officer at Coinbase, this week joined the board of directors of U.S.-India Business Council, part of the U.S. Chamber of Commerce.
“I’m honored to join the USIBC Board to help strengthen the bridge between India and the U.S. in shaping the future of finance,” he said in a statement shared by USIBC. “India has one of the largest and fastest-growing web3 ecosystems in the world, with a booming developer community, pioneering startups, and bold institutional adoption. Since 2018, its share of global web3 developers has quadrupled to 12%, the highest growth among emerging markets.”
Even as India is a key overseas market for U.S. tech giants, the crypto market remains small — in part because the local government implemented a 30% tax on crypto income and a 1% deduction on each transaction in 2022.
A reentry to India could help fill the void left by the implosion of the Indian exchange WazirX after the firm lost about half of its reserves in a heist. Now, CoinSwitch and CoinDCX are the top Indian crypto exchanges, and both are backed by Coinbase.