The American cryptocurrency exchange is in contact with a number of Indian authorities, including the Financial Intelligence Unit (FIU), a government agency in India that investigates financial transactions, according to two people with knowledge of the matter who asked not to be identified because the talks are confidential and ongoing.
Coinbase is attempting to recover from a tumultuous history in the South Asian market. The largest cryptocurrency exchange in the world, Binance, registered with the FIU and started operating in India last August following a seven-month regulatory hiatus. The move established a precedent for foreign cryptocurrency exchanges hoping to do business in India.
Coinbase’s last attempt to launch services in India was abruptly canceled in 2022. That year, in April, the exchange made its eagerly awaited debut.
Brian Armstrong, the CEO of Coinbase, later disclosed that the Reserve Bank of India’s “informal pressure” was the cause of the trade suspension. Although trading cryptocurrencies is legal in India, many business owners, investors, and other officials assert that lenders typically steer clear of virtual asset firms in the country to prevent upsetting the central bank.
When Coinbase can resume operations will depend on how long it takes to acquire the necessary approvals, such as an operating license from the FIU. The agency had previously discovered that several exchanges, including Kraken and Binance, were operating “illegally” in India. (Since then, a number of these businesses have cooperated with the FIU’s requirements for more thorough disclosures on user activities.)
“I’m honored to join the USIBC Board to help strengthen the bridge between India and the U.S. in shaping the future of finance,” he said in a statement shared by USIBC. “India has one of the largest and fastest-growing web3 ecosystems in the world, with a booming developer community, pioneering startups, and bold institutional adoption. Since 2018, its share of global web3 developers has quadrupled to 12%, the highest growth among emerging markets.”
The Indian government’s 30% tax on cryptocurrency profits and 1% transaction deduction in 2022 contributed to the small size of the cryptocurrency business, despite India being a major international market for American tech companies.
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