New Delhi: Coinbase, a US crypto trading platform is not accepting payments through the Unified Payment Interface or UPI in India while buying cryptocurrency. The crypto exchange platform has shared a disclaimer saying that it has “temporarily” suspended purchases using the method, following the company’s fall under NPCI lens for launching the service in India.
“Purchases with this payment method are temporarily unavailable,” read a disclaimer on the Coinbase mobile app on Sunday.
What is the Coinbase UPI controversy?
The world’s largest cryptocurrency exchange, Coinbase announced its arrival in India on April 7. It further stated that it will allow its users to purchase cryptocurrencies through the UPI system. However, this became trouble as the company came under the scanner of the National Payment Corporation of India or NPCI. Shortly, after its launch, the NPCI issued a clarification stating, “we are not aware of any crypto exchange using UPI.”
“They (Coinbase) reached out to NPCI following the clarification. But it means little as clearly cryptocurrency is not a legal tender in India. A regulatory body like the NPCI will not approve it unless it is officially legal,” Economic Times quoted a person aware of the matter. Besides, industry sources informed Money Control that NPCI’s stance is that UPI does not support crypto purchases.
“Payment aggregators are partnering with exchanges and are operating through multiple merchant IDs (MID). Informally, they have been told about the current regulations, but there is business interest for them to process these payments for crypto,” ET further quoted the source as saying.
Coinbase statement on UPI payments
Soon after the clarification post by NPCI, Coinbase issued its own statement saying, “We are aware of the recent statement published by NPCI regarding the use of UPI by cryptocurrency exchanges. We are committed to working with NPCI and other relevant authorities to ensure we are aligned with local expectations and industry norms.”
“As we enter the Indian market, we are actively experimenting with a number of payment methods and partners to enable our customers to seamlessly make their crypto purchases. One of these methods is UPI, a simple to use and rapid payment system,” the Nasdaq listed company added.
Notably, NPCI directly handles the UPI payments in India and Coinbase come under the scrutiny of the organisation after its announcement. After the announcement, banks had no choice but to stop UPI transactions on Coinbase. This comes when the Centre is preparing FAQs regarding the cryptocurrency bill to regulate virtual assets in the country.
