The National Payments Corporation (NPCI) stated it was “not aware of any crypto exchange” utilizing its fast payment system, putting Coinbase’s intentions to build a trading platform in India in jeopardy.
Coinbase made its formal debut in India last week, stating that its platform was enabled by the country’s Unified Payments Interface (UPI).
UPI is a real-time payment system that accounts for 60% of all retail payment traffic in India. While the NCPI did not outright forbid crypto transactions on the UPI system, it did encourage banks to make their own judgments on whether or not to accept them.
The State Bank of India (SBI), India’s largest national lender, abruptly stopped crypto merchants’ access to the UPI payment system in September. The decision was said to be based on risk concerns expressed by the central bank.
As of 2021, UPI is a major payment system in India, with around 300 million monthly active users. The use of UPI by Coinbase was viewed as a huge benefit.
Users are placed on a waiting list for the UPI option in the exchange’s app. “We are aware of the recent statement published by NPCI regarding the use of UPI by cryptocurrency exchanges,” a Coinbase spokeswoman told Gadgets 360. We are dedicated to collaborating with the NPCI and other relevant authorities to ensure that we are meeting local expectations and industry standards.”
With an estimated 15-20 million crypto users in India, Coinbase’s and other crypto exchanges’ use of UPI might be a game-changer. The UPI-linked ecosystem is often regarded as the most convenient way to conduct business in the country.
Only a few banks are supported by Binance’s domestic subsidiary, WazirX, for online banking transactions, while the main banks are not enabled at all.
Coinbase has long-term expansion intentions for India. At the Coinbase India launch, Founder and CEO Brian Armstrong remarked:
“Coinbase has a long-term plan for investing in India… We know it is not a straight shot to bring this technology and it will take time to evolve. Nothing will happen overnight.”
And the firm has already established a dedicated team in the nation to oversee acquisitions and investments.
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