Global cryptocurrency exchange Coinbase is discontinuing its services in India, requesting users to withdraw all funds from their accounts by September 25, according to a report from Economic Times. This decision comes after regulatory scrutiny initiated in both India and the United States.
According to the report, after September 25, the Coinbase website and app will no longer be accessible in India. Users with cash balances can withdraw funds through linked payment methods on the platform. Those holding crypto assets can transfer them to a chosen wallet, but it's essential to ensure that blockchain addresses match, as cryptocurrency transactions are irreversible.
Coinbase announced to the media that it stopped accepting new users on its exchange platform in India back in June. However, the company reaffirms its commitment to the country, even though its operations there have been uncertain for over a year.
Coinbase initially launched in India in April 2022 with the ability to buy crypto using the unified payment interface (UPI). However, the company quickly halted this service due to regulatory pressure. Since the suspension of UPI services last year, Coinbase's crypto services have not been available in India, and the recent communication appears to be part of an effort to clean up legacy accounts.
During the company earnings call in May last year, Coinbase CEO Brian Armstrong revealed that the decision to halt trading services in India was a result of “informal pressure” from the Reserve Bank of India (RBI), as reported by Bloomberg on May 11.
Armstrong highlighted that cryptocurrency trading is not illegal in India; in fact, the country has recently started taxing it. However, there are elements within the government, including the RBI, that have been less supportive. This informal pressure, often referred to as a 'shadow ban,' aimed to exert soft pressure behind the scenes to disrupt some of the payments going through UPI.
RBI has yet to establish a clear regulatory framework for cryptocurrencies, creating challenges for Coinbase and other crypto exchanges seeking to operate in India.
The company is now focusing on international expansion and obtaining licences in major financial jurisdictions with clear crypto industry regulations, according to a blog post. Near-term priorities include the European Union, the United Kingdom, Canada, Brazil, Singapore, and Australia.
In a blog post from September 6, the company stated that it is in the final stages of selecting the location for its EU hub, aiming to leverage its status as the most trusted brand in the crypto space ahead of the European elections in June 2024.