US crypto trading platform Coinbase does not currently accept payments via Unified Payment Interface, or UPI, in India while buying cryptocurrencies. The crypto exchange has posted a disclaimer stating that it has “temporarily” suspended purchases using the method, after the company came under NPCI lens for launching the service in India.
“Purchases with this payment method are temporarily unavailable,” read a disclaimer in Coinbase’s mobile app on Sunday.
What is the Coinbase UPI Controversy?
Coinbase, the world’s largest cryptocurrency exchange, announced its entry into India on Thursday, April 7. After that, it said it will allow its users to buy cryptocurrencies through the UPI system. This got them into trouble with the National Payments Corporation of India, or NPCI, as the company came under the organization’s scanner. NPCI issued a clarification shortly after the launch saying that “we are not aware of any crypto exchange using UPI”.
Statement by NPCI on April 7, 2022. With reference to some recent media reports regarding the purchase of cryptocurrencies with UPI, National Payments Corporation of India would like to clarify that we are not aware of any crypto exchange using UPI. See attached document pic.twitter.com/lGTcaSLKeC— NPCI (@NPCI_NPCI) Apr 7, 2022
“They (Coinbase) contacted NPCI after the clarification. But it means little as it is clear that cryptocurrency is not legal tender in India. A regulatory body like the NPCI won’t approve it unless it’s officially legal,” Economic Times quoted a person who was aware of the matter. Industry sources also told Moneycontrol that NPCI’s position is that UPI should not buy crypto. supports.
“Payment aggregators partner with exchanges and operate through multiple merchant IDs (MIDs). Informally, they have been made aware of current regulations, but there is a business interest for them to process these payments for crypto,” ET further quoted the source as saying.
Coinbase overview on UPI payments
Shortly after NPCI’s clarification, 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 together.” with NPCI and other relevant authorities to ensure we meet 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 seamlessly make their crypto purchases. One of these methods is UPI, an easy-to-use and fast payment system,” the Nasdaq-listed company added.
NPCI directly oversees UPI payments in India and Coinbase came under the supervision of the organization after the announcement. After the clarification, banks had no choice but to stop UPI transactions on Coinbase. This comes as the Center is preparing FAQs about the cryptocurrency law to regulate virtual assets in the country.
Read all the latest news, breaking news and IPL 2022 Live Updates here.