Coinbase Eyes Indian Comeback Amid Crypto Tax Hurdles

Coinbase, a leading U.S.-based cryptocurrency exchange, is reportedly exploring a return to the Indian market after facing regulatory setbacks in the past. According to sources close to the matter, Coinbase has been engaging in discussions with Indian regulators, including the Financial Intelligence Unit, to pave the way for its comeback.

Coinbase's previous attempt to launch services in India in April 2022 was short-lived. The company introduced support for the popular Unified Payments Interface (UPI) payment system but was forced to suspend operations just three days later. The National Payments Corporation of India (NPCI) refused to approve Coinbase's services, and the Reserve Bank of India (RBI) allegedly exerted informal pressure to halt the exchange's operations.

In September 2023, Coinbase took further steps to scale back its presence in India by disabling new user sign-ups for its exchange product. The company attributed this move to a desire to align its operations with updated standards.

Despite these challenges, Coinbase appears determined to relaunch its services in India with the necessary regulatory approvals. The exchange's return could potentially fill the void left by the collapse of WazirX, as two other local trading platforms, CoinSwitch and CoinDCX, are backed by Coinbase.

Cryptocurrency trading is legal in India, but the government's imposition of a 30% tax on crypto earnings and a 1% tax on transactions in 2022 has slowed down market growth.