Coinbase Eyes India Re-entry Amid Regulatory Shifts

Coinbase, a global cryptocurrency exchange, is reportedly planning a comeback in India after suspending its operations in the country over a year ago. The company is currently in discussions with Indian regulators, including the Financial Intelligence Unit (FIU), to secure the necessary approvals for a relaunch, according to a source familiar with the matter.

Coinbase is aiming to relaunch the same centralized exchange platform that it initially introduced in India, seeking to compete with local players such as CoinDCX and CoinSwitch. The source revealed that Coinbase is planning to do the same thing this time, but with local partners on board and a more clear strategy, which they didn't have last time.

Executives from Coinbase are expected to visit India in March to meet with the FIU as part of the company's efforts to meet regulatory requirements. Once the necessary approvals are obtained, the company aims to proceed with its relaunch, although the timing will largely depend on the completion of the regulatory process, which could stretch into the latter part of the year, the source said.

In 2022, Coinbase launched with support for India's United Payments Interface system but was forced to suspend those services after three days when the National Payments Corporation of India refused to recognize Coinbase's operations due to regulatory concerns. Following those struggles, Coinbase announced in September 2023 that it would discontinue all its operations in India, notifying some customers through email.

Exchanges in India have faced significant regulatory hurdles over the last few years as the country grapples with how best to regulate the industry. Economic Affairs Secretary Ajay Seth recently confirmed that India is revisiting its crypto stance, influenced by changes in other countries' approaches to digital assets, but a tax burden of 30% on trading, selling, or spending cryptocurrency persists.

In June 2024, the FIU targeted nine off-shore exchanges, including the world's largest crypto exchange, Binance, over allegations of operating in violation of local anti-money laundering regulations. Binance complied with the regulatory requirements, paid the $2.25 million fine, and resumed operations in India after a seven-month hiatus.

Despite its complex regulatory environment and lack of a clear framework, India continues to lead globally in crypto adoption. In 2024, India topped the position in Chain