The co-founder and chief executive of the U.S.-based Nasdaq-listed crypto trading exchange Coinbase, Brian Armstrong, has said it disabled Unified Payments Interface (UPI) payments after "informal pressure" from the Reserve Bank of India. In doing so, he said, the RBI may be in violation of the Supreme Court ruling, which had earlier removed the ban on crypto in India. Coinbase, which is the largest crypto exchange in the U.S., launched its services in India on April 7, 2022. However, it disabled its UPI services just three days after the launch.
During the launch, Coinbase said it would allow payments through UPI on its platform. The same day, the National Payments Corporation of India (NPCI) issued a statement stating it’s not aware of any crypto exchange using UPI. Following that, the UPI payments facility on Coinbase was showing as “temporarily unavailable”.
Armstrong-led Coinbase has already invested $150 million in home-grown Indian technology companies in the crypto and Web 3.0 space. The company had opened its Indian tech hub, which has 300 full-time employees and is planning to hire over 1,000 employees in India this year.
During the earnings call on May 10, Armstrong said there's a lot of interest in crypto amongst the people in India. "So we had an integration with what's called UPI. And this was a great example of just our international strategy. 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," says Armstrong.
He said 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 they, in the press, 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 adds. He said he has a concern that "they may be actually in violation of the Supreme Court ruling, which would be interesting to find out if it were to go there". In March 2020, in a historic verdict, the Supreme Court lifted the ban imposed by the RBI on cryptocurrencies in India.
Armstrong, however, did not elaborate on plans to reinstate UPI on its platform or the impact of its absence on the company’s India plans.
Coinbase's preference is just to work with them (Indian officials) and focus on relaunching, he said. "I think there's a number of paths 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," he adds.
He also said there's a lot of work to do in this area and the company aims to “kind of teach them” about the positive benefits. "The people of these countries generally really want crypto. And, so to me, that says that in most places in the free world and in democracies, crypto is going to eventually be regulated and legal, but it's going to take time for them to get comfortable with this," he says.
Meanwhile, Coinbase reported $1.17 billion in revenue during the first quarter of the 2022, recording a 27% drop on YoY basis. The company's net quarterly loss stood at $430 million.
