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US-based cryptocurrency exchange Coinbase does not accept payments made through Unified Payment Interface or UPI in India at this time while buying cryptocurrencies. The cryptocurrency exchange put out a disclaimer saying it had “temporarily” suspended purchases using the method, after the company came under NPCI’s lens for launching the service in India.
“Purchases using this payment method are temporarily unavailable,” read the disclaimer at Coinbase Sunday mobile app.
What is the Coinbase UPI Controversy?
Coinbase, the world’s largest cryptocurrency exchange, announced its entry into India on April 7, Thursday. After that, it said that it will allow its users to buy cryptocurrencies through the UPI system. This landed them in trouble with the National Payments Corporation of India, or NPCI, as the company came under the scanner of the organization. NPCI, shortly after the launch, issued a clarification saying “we are not aware of any crypto exchanges using UPI”.
Statement by NPCI dated April 7, 2022. Referring to some recent media reports about buying cryptocurrencies using UPI, National Payments Corporation of India would like to clarify that we are not aware of any crypto exchange using UPI. Please see the attached document pic.twitter.com/lGTcaSLKeC– NPCI (NPCI_NPCI) 7 April 2022
They (Coinbase) reached out to the NPCI after clarification. But it does mean that few cryptocurrencies are not legal tender in India. A person familiar with the matter is quoted by the Economic Times as saying that a regulator like the NPCI will not approve them unless they are formally legal.
“Payment aggregators partner with exchanges and operate through multiple business identifiers (MIDs). Unofficially, they have been told about existing regulations, but there is a business interest for them to process these payments for cryptocurrencies,” the source is quoted as saying by ET.
Coinbase statement on UPI payments
Shortly after the clarification from NPCI, Coinbase released 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 that we comply with local expectations and industry standards.” .
“As we enter the Indian market, we are actively experimenting with a number of payment methods and partners to enable our customers to make cryptocurrency purchases seamlessly. One such method is UPI, which is an easy-to-use and fast payment system,” the Nasdaq-listed company added.
NPCI directly monitors UPI payments in India and Coinbase came under scrutiny from the organization after its announcement. After the clarification, the banks had no choice but to stop UPI transactions on Coinbase. This comes as the center is preparing a Q&A regarding a cryptocurrency bill to regulate virtual assets in the country.
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