US-based cryptocurrency exchange Coinbase is considering reentering the Indian market after having halted its operations there in 2023. The company is currently in discussions with Indian regulators, including the Financial Intelligence Unit (FIU).
Coinbase's Operations Halt in India
In September 2023, Coinbase ceased its operations in India, asking local users to withdraw funds. This came after regulatory challenges, including a suspension of its UPI payment services just three days after launching its platform there in April 2022. The National Payment Corporation of India (NPCI) questioned the legality of crypto exchanges using UPI, leading to the cessation of operations.
Discussions with Indian Regulators
Coinbase is engaging in talks with the Financial Intelligence Unit of India (FIU) to explore reentering the Indian market. A Coinbase spokesperson expressed excitement about the opportunities in India and intends to comply with all regulatory requirements, though there are no updates on its FIU registration at the moment. This comes amid Coinbase's Chief Legal Officer Paul Grewal joining the US-India Business Council (USIBC) board.
Bybit Situation and Other Developments
Meanwhile, another major exchange, Bybit, has been fined 9.27 crore rupees ($1.06 million) by the Indian FIU for violating the country's Prevention of Money Laundering Act. This follows compliance issues that previously led to Bybit's suspension of operations in the country. Despite this, Bybit expects to obtain a full operational license in India in the coming weeks, having completed its registration application for a Virtual Digital Asset Service Provider license on June 26, 2024.
Coinbase's potential reentry into the Indian market aligns with the rapid growth of the Web3 ecosystem in the country, which could attract more institutional interest. Despite previous regulatory hurdles, Coinbase's plans to reestablish its presence could be a significant move toward solidifying its position in the emerging market.
