On Tuesday, March 11, U.S.-based cryptocurrency exchange Coinbase announced it has obtained the necessary approvals from India’s Financial Intelligence Unit (FIU) to resume operations in the Indian crypto trading market.
In a press release, the company stated, “Coinbase plans to launch its initial retail services later this year, followed by additional investment and products in India thereafter.” This move marks a significant step for Coinbase, which halted its operations in India over a year ago due to regulatory challenges, particularly with the Unified Payments Interface (UPI) system.
The development comes after the Indian government brought virtual digital assets (VDAs), including cryptocurrencies, under the ambit of the Prevention of Money Laundering Act (PMLA), 2002, in 2023. As a result, both offshore and onshore VDA service providers, such as crypto trading platforms, are now legally required to register with the FIU-IND and comply with PMLA regulations.
FIU-IND, a central government agency under the Union Ministry of Finance, is responsible for collecting, analyzing, and sharing information related to suspicious financial transactions with enforcement agencies and foreign FIUs.
Coinbase’s re-entry follows similar moves by other international crypto exchanges. For instance, Binance registered with FIU-IND in August last year to resume operations in India after a seven-month regulatory pause.
The platform’s return could also help fill the gap left by Indian exchange WazirX, which lost nearly half of its reserves in a security breach last year. Notably, other leading Indian crypto exchanges, such as CoinSwitch and CoinDCX, are backed by Coinbase.
John O’Loghlen, Coinbase’s Regional Managing Director for APAC, emphasized the company’s commitment to the Indian market, stating, “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. We’re committed to building in markets that believe in the potential of crypto and onchain innovation.”
In addition to retail services, Coinbase is looking to expand its crypto developer platform in India. O’Loghlen added, “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.”
Coinbase initially launched its crypto trading services in India in 2022, supporting payments via the UPI system. However, the service was suspended shortly after the National Payments Corporation of India (NPCI), which oversees UPI, stated it was unaware of any crypto exchange using the popular digital payments platform. Reports later suggested that Coinbase faced “informal pressure” from the Reserve Bank of India (RBI), leading to the suspension.
Cryptocurrency regulation in India remains complex. While the government has not yet legalized crypto assets, it has imposed a 30% tax on crypto income and a 1% tax deducted at source (TDS) on each transaction since 2022. At the same time, the government has shown support for blockchain technology and central bank digital currencies (CBDCs), such as the RBI-issued e-rupee, even as mainstream tokens like Bitcoin face regulatory uncertainty.
Coinbase’s return to India signals a renewed focus on the country’s growing crypto market, despite the ongoing regulatory challenges.