(Bloomberg) — India’s central bank applied “informal pressure” on Coinbase Global Inc, preventing the exchange from facilitating purchases of crypto assets through the country’s online retail payments system, chief executive officer Brian Armstrong said on Tuesday.
“So few days after launching, we ended up disabling UPI because of some informal pressure from the Reserve Bank of India,” Armstrong said at an earnings call after the company’s first-quarter results. India’s United Payments Interface in a central bank-backed system that facilitates real-time transfer between bank accounts.
The RBI did not immediately reply to an email seeking comment. A finance ministry spokesman could not be reached for a comment.
Last month, in a step towards expanding its operations into India, the US-based crypto exchange had integrated UPI on its platform to allow purchase of cryptocurrencies in rupees. But just three days into the launch, Coinbase disabled the service after the entity that runs UPI said it was “not aware” of any crypto exchange using the network.
Despite the setback, Coinbase is hopeful to go live in India again in ‘relatively short order’ along with other countries. It plans to make India its technology hub and triple the number of employees in the country to around a thousand in 2022.
Read more: Crypto Payments Frozen Across India, Hitting Trading
India shares a hot-and-cold relationship with private digital currencies in the past few years. In 2018, the RBI effectively removed crypto startups from the country’s banking network but the Supreme Court struck down the restriction in March 2020. Nevertheless, India’s central bank is opposed to them with Governor Shaktikanta Das terming it as a threat to financial stability and without any underlying value.
Read more: Crypto Is Like a Ponzi Scheme, India’s Central Bank Warns
“I guess we have a concern that they may be in violation of the Supreme Court ruling,” he said.
India announced a new tax regime for crypto assets earlier in February but the government is yet to finalize a regulatory framework.
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