“So a few days after launching, we ended up disabling UPI because of some informal pressure from the Reserve Bank of India, which is kind of the Treasury equivalent there,” Armstrong said at the company’s earnings call to discuss the first quarter financial results on Tuesday.
“India is a unique market, in the sense that the Supreme Court has ruled that they can’t ban crypto, but there are elements in the government there, including at the Reserve Bank of India, who don’t seem to be as positive on it,” he added, responding to a question on what had happened in India
ET was the first to report on April 10 that regulatory pressure had forced Coinbase to halt UPI payments in just three days. Coinbase’s launch of trading services in India on April 7 brought the use
of UPI for crypto under the lens, we reported on April 9. This led to a domino effect, resulting in CoinSwitch Kuber
also disabling UPI access for its users on April 12, we first reported.
UPI – a key digital payments railroad – is managed by the National Payments Corporation of India (NPCI) which comes under the ambit of the RBI.
Tough questions, and good questions, for NPCI and RBI in India. Is their “shadow ban” a violation of the supreme co… https://t.co/t8m7g53PFV
— Brian Armstrong – barmstrong.eth (@brian_armstrong) 1650923891000
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“And so they — in the press, it’s been called a “shadow ban,” basically, they’re applying soft pressure behind the scenes to try to disable some of these payments, which might be going through UPI,” Armstrong added.
ET reported on April 25 that Indian banks were questioning the ‘shadow ban’ on cryptocurrencies and had asked NPCI to spell out in a formal directive the curbs on the use of UPI.
India is central to Coinbase’s international expansion.
The company has been aggressively hiring top executives for its India operations,
including former Snap India head Durgesh Kaushik as senior director for market expansion.
It plans to triple its workforce to 1,000 this year in the region.
Armstrong said that Coinbase had concerns that the RBI was in violation of the 2020 Supreme Court ruling. “Would be interesting to find out if it were to go there”, he said, adding that he preferred to focus on relaunching its services in India.
Interestingly, Armstrong said Coinbase will continue to expand internationally even when it is not fully sure how its entry will be received in certain countries. According to the Coinbase founder, this could help push the conversation forward around the regulatory challenges being faced by crypto exchanges.
“That’s why we’re going to go launch, even if we’re not exactly sure how it’s going to — the reaction is going to be received, we’re going to launch because it forces the discussion to be had. Now the press is talking about it in India….there are meetings happening that are going to talk about how we get to the next step. So that’s generally our approach with international expansion,” he said during the call with analysts.
Armstrong said the company has a number of paths where it may have to relaunch with other payment methods there. “ .. So my hope is that we will be live back in India in relatively short order, along with a number of other countries, where we’re pursuing international expansion similarly,” he added.