Coinbase Launches in India, Hit With UPI Problem

The Nasdaq-listed cryptocurrency exchange Coinbase announced Thursday at an event in Bengaluru that its trading platform will be fully available for retail traders in India.

The company said that customers will be able to buy cryptocurrencies on Coinbase using the Unified Payments Interface (UPI), the most widely used payment method in India. Coinbase began testing UPI payments a few weeks ago. However, the company did not disclose the names of its banking partners for UPI payments.

UPI, an instant real-time payment system developed by the National Payments Corporation of India (NPCI), accounts for 60% of retail payment traffic in the country. The NPCI, an umbrella organization for operating retail payments and settlement systems in India, is an initiative of India’s central bank, the Reserve Bank of India (RBI), and the Indian Banks’ Association (IBA).

Shortly after Coinbase’s announcement, the NCPI issued a statement emphasizing that it is unaware of any cryptocurrency exchange using the UPI payment system. The NPCI wrote:

With reference to some recent media reports around the purchase of cryptocurrencies using UPI, National Payments Corporation of India would like to clarify that we are not aware of any crypto exchange using UPI.

In May last year, amid talks of the Indian government possibly outlawing cryptocurrency, the NPCI said it will not ban crypto transactions on the UPI system, advising banks to make their own decision on whether to allow the use of UPI through their platforms. However, most banks in India are reluctant to work with crypto exchanges.