Coinbase CEO Brian Armstrong: Disabled UPI because of informal pressure from the RBI

In its earnings call, Coinbase said that it suspended its UPI payment method due to 'informal pressure from RBI.' The exchange is now working with the RBI and plans its return to India with other payment systems in a relatively short time.

The US-based exchange launched its operations in India on April 7 through a mega event in Bengaluru. But, the same night, the National Payments Corporation of India (NPCI) issued a statement saying it is 'not aware of any crypto exchange using UPI.'

“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,” said Brian Armstrong, chief executive officer of Coinbase on its earnings call.

“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. And so 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,” he said.

He also said that the RBI’s move may be in violation of the Supreme Court ruling, but they are just looking to work with the RBI and focus on relaunching.

“I think there's a number of path that we have to relaunch with other payment methods there. And that's the default path going forward. So my hope is that we will live back in India in relatively short order, along with a number of other countries, where we're pursuing international expansion similarly.”

Coinbase saw a dip in its overall trading volumes, falling 44 percent from the fourth quarter. The Nasdaq-listed company clocked a revenue of $1.17 billion for the first quarter and reported a quarterly net loss of $430 million, compared with a profit of $840 million in the fourth quarter.

Indian exchanges are facing a dip in trading volumes after 30 percent tax came into effect from April 1 and 1 percent TDS will be implemented from July 1. Moreover, the GST Council is considering levying 28 percent tax on cryptocurrencies and related services. The proposal is likely to be tabled in the next GST Council meeting.