Coinbase Resumes Onboarding in India, Fiat On-Ramp Planned for 2024

Coinbase Re-enters the Indian Market

Following a hiatus exceeding two years, cryptocurrency exchange Coinbase has reactivated its application for user registration within India. Currently, the platform facilitates crypto-to-crypto trading. However, John O’Loghlen, Coinbase’s APAC director, announced during India Blockchain Week (IBW) that a fiat on-ramp will be implemented in 2026.

This forthcoming feature will enable Indian users to deposit funds and purchase cryptocurrencies directly.

Previous Challenges and Strategic Reset

Coinbase initially launched services in India in 2022, but swiftly encountered difficulties. Support for the Unified Payments Interface (UPI) payment network was suspended after the National Payments Corporation of India (NPCI) did not recognize Coinbase’s operations within the country.

Subsequently, in 2023, Coinbase discontinued all services for Indian users, requesting they close their accounts.

A Deliberate Approach to Re-entry

O’Loghlen explained that Coinbase previously had a substantial customer base in India. The company made a deliberate decision to completely remove these customers from its overseas entities.

This action, while commercially challenging, was undertaken to establish a “clean slate” for future operations within the Indian regulatory framework.

Regulatory Compliance and User Onboarding

Coinbase initiated engagement with the Financial Intelligence Unit (FIU), the governmental body responsible for overseeing transactions and preventing fraud. Registration with the FIU was completed earlier this year.

In October, a phased onboarding process began with early access users, and the application is now accessible to all.

India's Competitive Landscape

Numerous internet-based companies have established operations in India, aiming to capitalize on its vast online user base, the second largest globally.

While social media platforms and artificial intelligence firms, such as OpenAI, have experienced rapid growth, cryptocurrency companies have faced obstacles due to stringent regulations and taxation policies.

Taxation Concerns and Advocacy

Currently, India imposes a 30% tax on cryptocurrency income, without allowing for the offsetting of losses. A 1% deduction is also applied to each transaction, potentially discouraging frequent trading.

Coinbase expresses hope that the government will consider easing these tax regulations to reduce the financial burden on individuals holding digital assets.

Investment and Expansion Plans

Despite these hurdles, Coinbase remains optimistic about the Indian market. The company’s venture capital arm has further invested in local exchange CoinDCX, valuing it at $2.45 billion post-money.

Coinbase also intends to expand its team in India, which already exceeds 500 employees, by recruiting for roles focused on both domestic and international markets.

Focus on Trust and User Experience

O’Loghlen emphasized Coinbase’s commitment to being a trusted exchange, ensuring the security of user funds.

He stated that achieving widespread adoption requires a user-friendly interface and a seamless onboarding process, comparable to popular Indian applications like Zepto or Flipkart.