India starts Coinbase from payment interface

India may not have banned cryptocurrency, as it threatened, but the government is certainly making life difficult for exchanges trying to serve its potential buyers and traders.

On the heels of a tough tax regime that saw Indian exchange volume plummet when it went live on April 1, with CoinDesk reporting that major exchanges saw a 50%-75% decline, the bank Central Indian appears to have again targeted the exchange’s payment processing.

The Reserve Bank of India (RBI) had long banned banks from doing crypto business, effectively hampering exchange activity, before a Supreme Court ruling forced it to relent. In February, the RBI reiterated earlier calls for a full ban, likening crypto to a “Ponzi scheme” as it became clear the government was moving towards legalization.

Read more: RBI official likens crypto to ‘Ponzi schemes’

Today, the National Payments Corporation of India (NCPI) launched a major international exchange from its popular RBI-regulated Unified Payments Interface (UPI).

Leading US-based exchange Coinbase suspended customers’ ability to purchase cryptocurrencies on Sunday, April 10, saying on a help page that it was “due to an ongoing issue we are having” using the popular UPI service, which it had made a core feature of its services.

He added, “We don’t have any other payment method to buy crypto at this time. Thank you for your patience and understanding.”

It was only three days after the launch of the Coinbase service in the country.

a little too strong

On Thursday (April 7), the day Coinbase launched its service in India, CEO Brian Armstrong reportedly said, “India showed great will with UPI,” during a launch event.

Later in the day, NCPI tweeted released a statement saying that it “would like to clarify that we are not aware of any crypto exchange using UPI.”

It was somewhat of a setback for NCPI, which had previously expressed a willingness to work with cryptocurrency firms.

In September, the State Bank of India announced that it was cutting customers’ ability to use UPI to send funds to crypto exchanges. At the time, the NCPI said it would not block UPI crypto payments, explaining that banks would have to make their own decisions.

See more : India’s latest SBI bank to ban payments to crypto exchanges

A Coinbase spokesperson told Business Insider on Saturday (April 8) that the company is “committed to working with the NPCI and other relevant authorities to ensure we are aligned with local expectations and industry standards. ‘industry”.

NPCI announced that its flagship payment platform passed the $100 billion mark in October, with 4.2 billion transactions. And in January, NPCI tested offline digital payments using UPI. The UPI Lite service is for rural areas with spotty service and has a limit of 200 rupees (about $2.60).

Read more: India tests digital UPI payments without internet

Take the money

Although the Indian government did not ban crypto as it had expected, the harsh tax regime that came into effect this month has deeply curtailed the trade.

See more : Crypto comes to India with digital rupee, 30% tax

A 30% tax on profits does not provide a corresponding write-off for losses, and on July 1, a hugely controversial 1% withholding tax (TDS) on crypto transactions will come into effect.

So, given NCPI’s apparent U-turn on crypto transactions, it seems that the RBI’s determination to cripple crypto in the country continues to advance, despite the government’s acceptance.

The Indian government has forcefully reiterated in recent months that it will not approve the use of crypto for payments.

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