US crypto trading platform Coinbase is not currently accepting payments made through the Unified Payments Interface or UPI when buying cryptocurrencies in India. After the company came under the NPCI lens to launch the service in India, the crypto exchange has put up a disclaimer saying that it has “temporarily” suspended purchases using this method.
“Purchases with this payment method are temporarily unavailable,” read a disclaimer on coinbase Sunday mobile app
What’s the Coinbase UPI Controversy?
Coinbase, the world’s largest cryptocurrency exchange, announced its entry into India on Thursday, April 7. Subsequently, it said that it would allow its users to purchase cryptocurrencies through the UPI system. This landed him in trouble with the National Payments Corporation of India, or NPCI, as the company had come under the purview of the organization. Soon after the launch NPCI issued a clarification in which they said that “we are not aware of any crypto exchange using UPI”.
Statement by NPCI on 7th April 2022. With reference to some recent media reports regarding purchase of cryptocurrency using UPI, National Payments Corporation of India would like to clarify that we are not aware of any crypto exchange using UPI. Please see attached document pic.twitter.com/lGTcaSLKeC— NPCI (@NPCI_NPCI) April 7, 2022
“They (Coinbase) reached out to NPCI after clarification. But that doesn’t mean clearly cryptocurrency is not legal tender in India. A regulatory body like NPCI will not approve it until it is officially legal. Ho.” The Economic Times quoted a person familiar with the matter as saying. Industry sources also told Moneycontrol that NPCI’s stand is that UPI does not support crypto buying.
“Payment aggregators are partnering with exchanges and operating through multiple merchant IDs (MIDs). Unofficially, they have been informed of the existing regulations, but for crypto to process these payments. There is commercial interest to them,” ET further quoted the source as saying.
Coinbase statement on UPI payment
Shortly after the clarification issued by NPCI, Coinbase made its own statement, “We are aware of the recent statement published by NPCI regarding the use of UPI by cryptocurrency exchanges. We will work with NPCI and other relevant authorities to ensure that the We are committed to ensure that we are in line with local expectations and industry norms.”
“As we enter the Indian market, we are actively experimenting with multiple payment methods and partners to enable our customers to make their crypto purchases seamlessly. One of these methods is UPI, easy to use and Faster payment system,” the Nasdaq listed company said.
NPCI directly oversees UPI payments in India and Coinbase came under the organization’s scrutiny after its announcement. After the clarification, banks had no option but to stop UPI transactions on Coinbase. This comes at a time when the Center is preparing an FAQ regarding the cryptocurrency bill to regulate virtual assets in the country.
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