Indian payments body dismisses Coinbase launch

The National Payments Corporation of India, which maintains the country’s Unified Payments Interface (UPI), released a voluntary statement saying it did not know of any crypto exchange using UPI. This came after Coinbase announced its launch in the country featuring UPI support.

Why should we care?
Once more, a UPI-related flareup proves how effectively Indian regulators have shaped fintech in their image by functioning as the keystone payments rails in the country. State officials have proceeded with extreme caution when it comes to crypto: The Reserve Bank of India even banned cryptocurrencies, only to have the Indian Supreme Court overturn the ban two years ago. The NPCI’s statement all but guarantees that Coinbase won’t be able to use UPI frameworks to sell cryptocurrencies to Indian consumers. In part, India may want to avoid opening the crypto floodgates before it irons out taxation concerns. In the U.S., massive crypto adoption has led to concerning tax uncertainty. A survey conducted by tax-compliance platform CoinTracker suggests 84% of crypto investors aren’t confident in their tax status this year, and 97% misunderstood key taxable events like NFT purchases and coin-for-coin exchanges. Tamping down Coinbase’s adoption in India may let regulators see how widespread crypto adoption affects consumers in other countries, and proceed accordingly.