Coinbase CEO blames India’s central bank for halting trading operations

May 11, 2022, 13:42 IST

Brian Armstrong CEO of Coinbase

Coinbase started offering trading operations in India on April 7 but withdrew the same by April 10.
Armstrong also said that Coinbase plans to work with the government to relaunch here.
Coinbase has invested in Indian crypto exchanges, CoinDCX and CoinSwitch Kuber.

Coinbase, which ventured into and subsequently shut down trading services in India last month, has blamed the country’s central bank and government for the closure. In an earnings call on May 10, the company’s chief executive officer (CEO) Brian Armstrong said that the country’s authorities are applying “soft pressure” in order to discourage crypto trading within its borders.

The US-based publicly listed crypto exchange had started operations in India, amid much fanfare, on April 7. The company allowed users to deposit money on its platform using the country’s unified payments interface (UPI) platform — a system that was built and is maintained by the National Payments Corporation of India (NPCI).

However, a mere few hours after Coinbase’s launch, the NPCI issued a statement saying it “wasn’t aware” of any crypto exchange using UPI to buy cryptocurrencies. Which led Coinbase and other crypto exchanges in the country to halt the feature in the country.

India is a unique market, in the sense that the Supreme Court has ruled that they can't ban crypto, but there are elements in the government there, including at (the) Reserve Bank of India (RBI), who don't seem to be as positive on it. And so they — in the press, it's been called a ‘shadow ban,’ basically, they're applying soft pressure behind the scenes to try to disable some of these payments, which might be going through UPI

Brian Armstrong, Coinbase CEO told analysts in earnings call on May 10

The road ahead

That said, Armstrong also added that the company would prefer to work with the government and “focus on relaunching”. He said that there’s a lot of interest in cryptocurrencies among users in India.

“I think there's a number of paths that we have to relaunch with other payment methods there. And that's the default path going forward. So my hope is that we will be back in India in relatively short order, along with a number of other countries, where we're pursuing international expansion similarly,” he said.

Crypto & RBI’s concerns

Armstrong, however, also said that the rulings by government bodies may be in violation of the Supreme Court ruling issued in 2020. At the time, the country’s highest court struck down a ban by the RBI, calling it illegal and unconstitutional.

To be sure, the SC never said that the government can’t ban cryptocurrencies. It said that the RBI ban is “disproportionate and unreasonable”.

“I guess just to zoom out for a minute, one of our theories here, and my theory is that action produces information. So it's not always clear as we go to these countries all over the world, everybody is in varying states of kind of education or lack thereof about crypto. And there's a lot of work to go meet with policymakers around the world and kind of teach them about what the AML (anti-money laundering) capabilities are and what are the positive benefits,” Armstrong said.

Coinbase has invested in Indian crypto exchanges CoinSwitch Kuber and CoinDCX and runs incubators with crypto-focused bodies like Buidler’s Tribe in the country.

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