The CEO of Coinbase has pointed fingers at the central bank authorities, claiming “informal pressure,” which brought trading to a halt, leading to revenue loss.
However, Coinbase co-founder and CEO Brian Armstrong was recently asked about this situation. Responding to these queries, Armstrong claimed that “informal pressure” from the RBI forced the team to pause the UPI operations in the country.
“...elements in the government there, including at Reserve Bank of India, who don’t seem to be as positive on it. And so they — in the press, it’s been called a ‘shadow ban,’ basically, they’re applying soft pressure behind the scenes to try to disable some of these payments, which might be going through UPI…our preference is really just to work with them and focus on relaunching. I think there’s a number of path that we have to relaunch with other payment methods there. And that’s the default path going forward.”
Armstrong has pointed out that crypto trading is not illegal in India since the recent Budget 2022 included the announcement of a 30% crypto tax. He also mused that the moves being adopted by the RBI to quash India’s growing crypto industry could be in violation of the Supreme Court ruling. Several Indian banks have already questioned the ‘shadow ban’ being imposed on UPI for crypto trading, claiming it to be illegal.
Revenue Loss In Q2 2022
The operational shutdown in India has had a significant impact on the revenue of the NASDAQ listed company. Where the exchange pulled in $1.17 billion of revenue in just the first quarter of 2022, there has been a steep 35% drop since then, with a quarterly net loss of $430 million. Trading volumes have also been down 44% since the previous quarter.
“The people of these countries generally really want crypto. And so to me, that says that most places in the free world and democracies, crypto is going to eventually be regulated and legal, but it’s going to take time for them to get comfortable with this.”
Governing Body Denies UPI Support
The US-based crypto exchange had only recently (April 2022) launched its eponymous crypto trading service in India. The country’s expansive internet market and the retail banks-led payments infrastructure, UPI, made the deal sweeter for Coinbase. The app launched in the country was allowing Indians to buy crypto tokens using UPI. Soon after the launch, the National Payments Corporation of India (NPCI), which is the governing body overseeing UPI operations, refused to acknowledge UPI support on the Coinbase app. Therefore, within just three days of its launch, the operations were paused without further information.
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