Coinbase Starts Onboarding Users Again in India, Plans for Fiat On-Ramp Next Year
After a two-year pause, Coinbase is back in India, allowing crypto-to-crypto trades and eyeing a fiat on-ramp for 2026.
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**Coinbase is back in India!** After a two-year hiatus, the crypto exchange has reopened its app for user registrations. Initially, users can engage in crypto-to-crypto trading, but plans are in place for a fiat on-ramp in 2026, enabling users to buy crypto with local currency. This move comes after a tumultuous history in the Indian market, where Coinbase faced regulatory hurdles and had to cease operations earlier this year. The reopening of the app marks a significant step for Coinbase as it aims to regain its user base and establish a more stable presence in the country. The company is optimistic about its future in India, hoping to build a trusted platform for users in a market that has been challenging for many crypto firms. With the introduction of a fiat on-ramp, Coinbase is looking to make it easier for Indian users to enter the cryptocurrency space, which could lead to increased adoption and trading activity in the coming years.
A Rocky Road Back to India
Coinbase first launched in India in 2022 but quickly faced challenges. The company had to shut down support for the Unified Payments Interface (UPI) after the National Payments Corporation of India (NPCI) refused to recognize its operations. This refusal highlighted the regulatory complexities that crypto exchanges face in India. By 2023, Coinbase had completely off-boarded Indian users, citing regulatory concerns and the need for a clean slate. The decision to off-board users was difficult, as Coinbase had millions of customers in India. Now, with a fresh start, the company is cautiously optimistic about its future in the Indian market, aiming to navigate the regulatory landscape more effectively this time around.
Engagement with Regulators
To navigate the complex regulatory landscape, Coinbase has engaged with the Financial Intelligence Unit (FIU) of India. This year, the company registered with the FIU, a crucial step for compliance with local laws. Engaging with regulators is essential for any financial service provider, especially in the crypto space, where regulations can be stringent and evolving. John O’Loghlen, Coinbase’s APAC director, emphasized the importance of building trust with regulators to ensure a smooth onboarding process for users. By fostering a positive relationship with regulatory bodies, Coinbase aims to create a more stable environment for its operations in India, which is vital for long-term success.
Challenges Ahead: Taxation and Regulation
Despite its return, Coinbase faces significant hurdles in India. The country imposes a hefty 30% tax on crypto income and a 1% transaction deduction, which could deter frequent trading. These regulations create a challenging environment for crypto exchanges and their users, as high taxes can discourage investment and trading activity. O’Loghlen expressed hope that the government would reconsider these regulations to foster a more favorable environment for digital asset trading. Addressing these taxation issues is crucial for Coinbase to attract and retain users in a competitive market where many potential customers may be deterred by the financial implications of trading.
Investment and Growth Plans
Coinbase is not just re-entering the market; it's also investing in it. The company’s venture arm has backed local exchange CoinDCX, valuing it at $2.45 billion. This investment reflects Coinbase's commitment to the Indian market and its belief in the potential for growth in the region. Additionally, Coinbase plans to expand its workforce in India, focusing on roles that cater to both local and global markets. This hiring initiative signals a long-term commitment to the region and aims to strengthen Coinbase's operational capabilities. By investing in local talent and partnerships, Coinbase hopes to enhance its service offerings and better meet the needs of Indian users.
User Experience is Key
O’Loghlen highlighted the importance of user experience in attracting customers. He stated that Coinbase aims to provide a seamless onboarding process, akin to popular Indian apps like Zepto and Flipkart. A user-friendly interface and efficient onboarding are critical for gaining traction in a competitive market. Building a trusted platform is essential for Coinbase to regain its footing in the competitive Indian market. By prioritizing user experience, Coinbase hopes to differentiate itself from other exchanges and create a loyal customer base. Ensuring that users feel secure and supported will be vital for Coinbase's success as it re-establishes its presence in India.
Why it matters
- Coinbase's return signals renewed interest in the Indian crypto market.
- The planned fiat on-ramp could simplify crypto purchases for millions of users.
- Engagement with regulators may pave the way for other crypto firms to enter India.
- Investment in local exchanges indicates confidence in India's growth potential.
- User experience improvements could set a new standard for crypto trading in India.
Context
India is the world's second-largest online user base, making it a critical market for tech companies, especially in the crypto sector.
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