May 25, 2022

Cryptocurrency giant Coinbase has suspended support for the UPI payment tool on its app in India less than three days after launching a trading service on the world’s second largest online marketplace, rendering all purchase orders unusable.

Users attempting to purchase tokens listed on the Coinbase India app will be notified that the UPI payment method is “currently unavailable”. The app encourages users to try a different payment method, but currently, according to several users, it does not support any other method of purchasing in the country.

The move follows a strange announcement from the National Payments Corporation of India, the governing body that oversees UPI in the country, which on Thursday night said it was aware of any cryptocurrency exchange using the UPI payment tool.

A Coinbase executive talks about UPI payments in India at the company’s first event on Thursday. (Image credit: Coinbase)

In a statement later that day, Coinbase said it intends to work with the NPCI and other relevant authorities. On Thursday, Coinbase asked gaming-updates if it plans to continue supporting UPI payments while negotiating with various authorities. The company did not answer the question.

A statement from the payment agency, a special arm of the Indian central bank, outlines why other cryptocurrency exchanges in India are having trouble supporting UPI — the most popular online transaction method among Indians — on their platforms. Cryptocurrency is not illegal in the South Asian market, but the Reserve Bank of India insists that virtual digital assets need more attention. India’s Supreme Court overturned the Reserve Bank of India’s ban on cryptocurrencies more than two years ago, but banks tend to remain in the hands of the central bank. It follows from the NPCI statement that UPI is still not suitable for cryptocurrency in India.

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