Coinbase misadventure in India has its consequences

Coinbase, the most popular crypto exchange in the United States, has big ambitions. Among other things these ambitions focus on conquering a new world, which would allow the crypto exchange to expand its audience at a time when crypto trading volumes are slowing in the United States. One of the milestones (probably the largest one) is India with its 1.38 billion people. The company is now betting on the country and making “a long-term investment” but not everything is going flawlessly. The international expansion of the firm has just suffered a crushing defeat that also affects fans of digital currencies. Here you can read about it.

The impact is colossal since Coinbase customers now find themselves without the means to fund their accounts with rupees.

“As of April 10, buys are currently disabled due to an ongoing issue we’re experiencing with the UPI system,” Coinbase said on its website. “We’re working hard to resolve the issue, and we advise that you check your account periodically to see if the issue is fixed.” Currently (24.04.2022) Indian customers can only buy crypto with UPI.

India, together with Vietnam, is one of the countries where the adoption of crypto is the most widespread, according to data and research firm Chainalysis.

“It is estimated that over 100 million people, 7.30% of India’s total population, currently own cryptocurrency,” TripleA, a Singaporean crypto fintech firm, said in a recent report. “The daily average trading volumes of different cryptocurrencies rose as much as 500 percent in volumes during the period of March 2020 to February 2021. Many are open to the idea of crypto as they explore alternative ways to store their wealth,” the report said.

Coinbase wasn’t the only one affected. Since its announcement, at least four other companies that provide crypto-related trading services have either suspended rupee deposits or seen banks and payment gateways pull support for money transfers onto their platforms, according to executives at the firms and local media reports. Two other exchanges had lost support for rupee deposits from a payment service provider before the incident. “After the Coinbase announcement, whoever was providing support to the industry has withdrawn support,” said Vikram Subburaj, chief executive officer of crypto exchange Giottus, in an April 12 interview. Giottus’s payment gateway stopped working with it, he said, declining to name the company. Trading volume on the platform plunged about 70% as a result, Subburaj said. Local rival BuyUcoin has also halted payments via UPI after the notice from NPCI, said co-founder Atulya Bhatt.