Global crypto exchange Coinbase has registered with India’s Financial Intelligence Unit (FIU) as part of its international expansion strategy, starting with crypto trading services in country later this year.
This comes at a time when the crypto sector is getting heated up with the US President Donald Trump’s pro-crypto policies. Coinbase follows the footsteps of rivals Binance and KuCoin by entering India, which is seen as a prominent market for the sector.
Coinbase will launch its initial retail services later this year, followed by additional investments and expansion of products, the exchange said in a blog post on March 11.
“We’re committed to building in markets that believe in the potential of crypto and onchain innovation,” said John O'Loghlen, Regional Managing Director for APAC at Coinbase.
He added, “India represents one of the most exciting market opportunities in the world today, and we’re proud to deepen our investment here in full compliance with local regulations.”
According to the blogpost, India’s emergence as a “global technology powerhouse, home to one of the most vibrant startup ecosystems, makes it a natural fit for Coinbase’s international expansion.”
“The country has rapidly grown into an onchain development hub, with its share of global developers increasing from 3% in 2018 to 12% in 2023. Among emerging markets, India now boasts the highest concentration of talent in the onchain space,” the exchange noted.
While it had discontinued its exchange services in the country after running into troubles with the Reserve Bank of India (RBI) and enabling UPI services on the exchange back in 2023, it had quietly continued to expand its back end tech team in the country.
“India’s developer community and entrepreneurial energy are unmatched,” said O'Loghlen.
“But too often, young Indian entrepreneurs have felt forced to look abroad to build global companies. Crypto can change that. By expanding access to our trusted platform and tools such as Base, we aim to empower a new generation of builders to stay home, innovate locally, and scale globally,” he added.
Recently, Paul Grewal, Coinbase’s Chief Legal Officer, was appointed to the Board of the U.S.-India Business Council (USIBC). The USIBC plays a pivotal role in advancing the U.S.-India commercial relationship, and Coinbase looks forward to being an active participant in this dialogue.
Second Innings
Coinbase has had a troubled journey in India after launching in the country in April 2022, the same year the government implemented high taxes on crypto. There were further challenges on enabling UPI-based payments to buy or sell crypto on the platform. To be sure, access to banking services and allowing INR withdrawals still continues to remain a bottleneck for the sector.
The exchange had earlier said that its Indian tech hub which then had about 300 fulltime employees, would expand with the addition of over 1,000 people in 2022.
While one of its USPs in the country was going to be its UPI payment option, it had to be stopped soon after, facing pressure from regulators.
In May 2022, Brian Armstrong, the co-founder and CEO of Coinbase, said during the company’s first quarter earnings call that the company faced “soft pressure” from the Reserve Bank of India to disable UPI-based payments.
In September 2023, the company informed customers in India, stating that it was discontinuing services to Indian customers and their funds had to be withdrawn from their accounts by September 25. This deadline was extended to October 31.
Also read: Coinbase is hiring for tech roles in India despite halting exchange services
Increased competition
In the beginning of 2024, several off shore exchanges were banned in the country after it was found that they were not following local anti-money laundering rules and weren’t registered in the country. These included Binance, KuCoin, OKX, Houbi and five other exchanges.
Now, with the biggest players Binance, Coinbase and KuCoin getting active in the country again, the domestic crypto exchanges will be facing tough competition.
But domestic exchanges last week said that they are far from worried. Speaking at the Moneycontrol Global Wealth Summit, Sumit Gupta, Co-founder and CEO, CoinDCX said that not only will Indian crypto exchanges survive but also win as the intensifying competition from global peers would “create the market.”
Gupta said, “Let them set the field. But eventually, Indian domestic players 5-10 years down the line will have a dominant role to play in the system. I do believe that it's going to be a heavily regulated industry, eventually. And when regulations are there, then it's not easy to operate. Only the long-term seriously committed players essentially win the market.”
Edul Patel, Co-founder of Mudrex concurred, adding, “What it takes to go from a small market to becoming a very large market is more players coming in and they come in when there is more clarity and that's exactly what we're seeing.”
“The clarity is improving which is prompting more and more larger global players to come in a market like India which is already known to be a very large market and then spend time, money and people educating the market and helping them understand what this asset class is about,” he said.
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