Key Takeaways
- Coinbase is engaging with Indian regulators for re-entry after halting operations over regulatory challenges.
- The timeline for Coinbase’s return depends on securing approvals like an FIU operating license.
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Coinbase is actively working with relevant Indian authorities, including the Financial Intelligence Unit (FIU-IND) in a bid to re-establish its presence in the market, according to a new report from TechCrunch, citing sources with knowledge of the matter.
The move comes after the firm stopped onboarding new users in India in June 2023. The country’s authorities strictly regulate digital assets, despite their growing adoption. While crypto trading remains legal in India, banks largely avoid serving digital asset firms to maintain positive relations with the central bank, many industry participants reported.
India already taxes digital assets, charging 1% tax-deducted-at-source (TDS) on crypto transactions and imposing a 30% capital gains tax from 2022.
Developments in other jurisdictions, including a pro-crypto stance from the new US administration, are prompting India to re-evaluate its approach to crypto regulation.
Reuters reported earlier this month that the government is revisiting its discussion paper on crypto, which was originally slated for release in September 2024.
One of Coinbase’s biggest global competitors, Binance, successfully resumed its operations in India in mid-August last year, after a seven-month ban due to non-compliance issues. The FIU previously declared several exchanges, including Kraken and Binance, were “illegally” operating in India.
With Binance back and other global exchanges potentially following suit, the Indian crypto sector is poised for rejuvenation.
A Coinbase spokesperson said the firm “is excited by the opportunities in the Indian market,” aiming to comply with domestic financial regulations. FIU registration status has not yet been disclosed.
The UK’s Financial Conduct Authority (FCA) recently authorized CB Payments Ltd., a subsidiary of Coinbase, to directly offer crypto services in the UK. This FCA registration enables Coinbase to serve UK customers directly in compliance with anti-money laundering regulations.
The approval marks a major development for Coinbase, securing its position as a major digital assets provider in the UK, its largest international market.
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