Coinbase, the US’s biggest cryptocurrency exchange, will re-enter India after receiving a critical regulatory nod.
This move follows President Donald Trump’s strong support for digital assets.
Coinbase overcomes regulatory setbacks and plans a comeback
Coinbase halted local operations in the country in 2022 after what chief executive Brian Armstrong described as “informal pressure” from a central bank that has strongly opposed the adoption of cryptocurrencies.
Coinbase said Tuesday that it had received approval to register with India’s Financial Intelligence Unit (FIU), an agency that monitors anti-money laundering in the country.
Coinbase isn’t just thinking of the business; as it returns to India, it is looking to establish a foothold in one of the world’s fastest-growing markets for digital finance.
Coinbase will relaunch limited operations in the country and provide retail trading services once it receives registration from the regulatory body, which is expected by the end of this year. This service will then gradually be rolled out to other crypto products.
Binance and other major crypto exchanges have also recently registered with the FIU following an Indian crackdown on overseas operations they claim were flouting local rules. “India represents one of the most exciting market opportunities in the world today,” said John O’Loghlen, the managing director for Asia-Pacific at Coinbase.
Coinbase is set to impact India’s growing crypto market
Despite regulatory uncertainty, India has experienced a boom in cryptocurrency adoption in recent years.
Now, it’s the fifth-largest nation globally for crypto adoption, with millions of users trading, investing, and discovering the new frontier of digital assets.
Still, even with a 30% tax on crypto trading profits and a 1% tax deducted at the source on every transaction, Indian investors continue to flood into the market.
Some big domestic exchanges, with CoinDCX, WazirX, and Bitbns at the helm, have kept the industry engine running.
There are also a plethora of global platforms—such as Binance and KuCoin, to name just a few—that have devised workarounds to service Indian customers.
In addition, Coinbase’s re-entry into the Indian market would go a long way toward strengthening the crypto ecosystem locally. This will significantly boost investors’ confidence, promote innovation within the industry, and help transnational blockchain and decentralized finance startups.
A trusted global exchange like Coinbase can help shape the future of India’s crypto sector by establishing best practices in security, compliance, and customer protection.
India has followed a cautious and uncertain policy direction on crypto for years. The Reserve Bank of India officials have become increasingly concerned about the financial risks posed by digital currencies and have warned the growth of such currencies could disrupt the economy and impact the monetary system.
Simultaneously, the Indian administration has assumed a middle-ground approach towards crypto, neither fully embracing it nor denouncing it outright.
The registration of Coinbase is noteworthy as it indicates an increasing shift towards a more organized regulatory approach as opposed to repressive policies.
Coinbase’s fortunes in the region may depend on the kind of federal regulatory approval it receives, what partnerships it can strike with other financial institutions in India, and whether it can mend broken bridges with its Indian users after its own exit
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