Coinbase CEO Says ‘Informal Pressure’ From India’s Central Bank Has Caused Trading To Halt – TechCrunch

Coinbase halted trading service in India due to “informal pressure” from the Reserve Bank of India, the crypto exchange’s chief executive said on Tuesday, addressing the notable Indian episode for the first time in a month.

The Nasdaq-listed company launched its eponymous crypto trading service in India to much fanfare on April 7. The app allowed users of the world’s second-largest internet marketplace to purchase crypto tokens using UPI, a wildly popular Indian payment infrastructure built by a coalition of retailers. banks. But just three days after launch, the company canceled the service without explanation.

The move follows a bizarre statement from the National Payments Corporation of India, the governing body that oversees UPI in the country, in which it refused to acknowledge UPI’s support of the Coinbase app.

Asked about the Indian episode of the company’s earnings call, Coinbase co-founder and chief executive Brian Armstrong said Coinbase disabled UPI “due to informal pressure from the Reserve Bank of India. ”.

Armstrong pointed out that cryptocurrency trading is not illegal in India — in fact, the South Asian nation has only just started taxing it — but there are “elements within the government there, including at the Reserve Bank of India, who don’t seem to be as positive about it. And so they – in the press it’s been called a ‘phantom ban’, basically they’re applying a little pressure behind the scenes to try to disable some of these payments, which might go through UPI,” he said. declared.

The Reserve Bank of India’s action “may in fact be in violation of the Supreme Court’s ruling, which would be interesting to know if it were to go. But I think our preference is really to work with them and focus on the recovery. I think there are a number of avenues we need to revive with other payment methods out there. And that’s the default way forward,” he said.

The Reserve Bank of India previously banned cryptocurrency – a decision overturned by the country’s top court more than two years ago – but the central bank continues to informally pressure banks to do not engage in cryptocurrency exchanges, TechCrunch reported earlier.

This pressure – and bank compliance – is why popular cryptocurrency exchanges in India periodically face issues supporting fiat currency in the country. An executive at one of the cryptocurrency exchanges told TechCrunch that he could also challenge the central bank’s action in court, but warned that such a legal battle could take years and their businesses could be wiped out by then, which is why crypto players in India are hoping that the central bank will ease its stance on its own in some time.

Armstrong added:

I guess just to zoom out for a minute, one of our theories here and my theory is that action produces information. So it’s not always clear when we go to these countries around the world, everyone is in different states of education or lack of education on crypto. And there’s a lot of work to do to go and meet with policy makers around the world and kind of explain to them what AML capabilities are and what the positive benefits are. People in these countries usually really want crypto. And so to me, that says most places in the free world and democracies, crypto is eventually going to be regulated and legal, but it will take time for them to get comfortable with that.

And the way we move the conversation forward is by taking action. That’s why we’re going to launch, even though we don’t know exactly how it’s going to go – the feedback is going to be received, we’re going to launch because it forces to have the discussion. Now the press is talking about it in India. Now there are meetings that are going to talk about how we are going to take the next step. So that’s generally our approach with international expansion.

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Coinbase CEO Says ‘Informal Pressure’ From India’s Central Bank Has Caused Trading To Halt – TechCrunch

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