Coinbase adds support for the popular payment instrument UPI in India, bringing the cryptocurrency exchange of the same name to the second largest online marketplace in the world for the first time.
The public company, which began testing UPI payments a few weeks ago, made the official launch at its first event in India on Thursday and said it is expanding its range of products in the country.
UPI’s payment infrastructure, developed by a consortium of retail banks, has become the most popular way for Indians to conduct online transactions. A company spokesperson said that Coinbase users in India can add and withdraw funds from their accounts using the UPI network. To encourage customers to try the Coinbase app, the company is offering $2.65 to anyone who signs up.
Notably, the company did not disclose the names of its banking partners to roll out UPI payments. Echoing the NCB’s long-standing view of virtual digital assets, most banks in India continue to make fun of cryptocurrency-related transactions.
Even though India’s Supreme Court overturned RBI’s ban on cryptocurrencies and the country began taxing crypto transactions, banks are still following the central bank’s directive. RBI officials have publicly called for more research into the cryptocurrency.
Reserve Bank of India (RBI) Deputy Governor T. Rabi Shankar told an audience at a banking conference in February that cryptocurrencies are “tailor-made to bypass the regulated financial system” and are not backed by any underlying cash flow.
“We also noticed that cryptocurrencies cannot be defined as currencies, assets, or commodities; They have no underlying cash flows, they have no intrinsic value; That they are connected to Ponzi schemes and perhaps even worse,” he said.
“As a store of value, cryptocurrencies such as bitcoin generated impressive returns, as did tulips in the 17th century Netherlands. Cryptocurrency is like a speculative or gambling contract that works like a Ponzi scheme. It has also been argued that the original scheme, formulated by Charles Ponzi in 1920, is socially superior to cryptocurrencies,” he said.
The emergence of Coinbase, which operates in dozens of markets, comes at an interesting time in India. Coinbase is already an investor in two of the largest local crypto exchanges: CoinSwitch Kuber and CoinDCX.
New Delhi’s move last week to impose a tax on cryptocurrency income in the country prompted hundreds of thousands of people to reduce or stop trading in crypto, according to people familiar with the matter.
Coinbase, which has not recognized India’s strict tax laws, said it is betting on India “for the long term.” Coinbase co-founder and CEO Brian Armstrong said the company has already invested $150 million in Indian startups and plans to more than triple the country’s workforce to 1,000 this year.
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