Coinbase stops UPI Payments in India just after 3 days after the Launch
Following a surprise turn of events, Coinbase halted UPI Payments temporarily in India after just 3 days of launch in the country. The company also changed the description of its Twitter profile to “Chalo shuru karein!”
Coinbase is one of the largest crypto exchanges in the world. It had organized an event to mark its entry into the Cryptocurrency market in India which reportedly hosts more than 100 million investors and active users. The event came to the notice of NPCI, the regulatory body which oversees UPI.
NPCI had said in a notice said that they were not aware of any cryptocurrency exchange using UPI in India. Below is a copy of the statement:
Background
Cryptocurrencies were taxed for the first time in the Annual Budget’s Financial Bill 2022. There was a tax of about 30% on profits arising from virtual digital assets and a TDS of a flat 1%.
Coinbase
Coinbase is one of the leading cryptocurrency exchanges that has a worldwide presence. It is headed by its CEO Brian Armstrong and is based out of the USA. The company entered India a few days earlier with a big event.
UPI
UPI is the most popular digital payment method in India. It is operated by the National Payments Corporation of India, a body jointly owned by the Reserve Bank of India and the Government of India. UPI has a share of over 50% in retail digital payments and processes about 200 Million transactions daily in India.
It is not too much to assume that without UPI, it would be very difficult to survive in a retail market in India.
Our Analysis
We have sufficient reason to assume that the halt of UPI transactions is temporary because it is difficult to succeed in a big market like India without the most popular payment processing service. Further, any relief is also not expected soon because UPI would not allow access unless cryptocurrencies are legalized in India. At present they are restricted and taxed but not legalized.