Coinbase Halts UPI Deposits in India Following the NPCI Statement

Coinbase halted payments via Unified Payments Interface (UPI) on Sunday in less than 4 days of the launch. Clients of the crypto exchange in India are unable to purchase cryptocurrencies via UPI as a payment method. 'Currently unavailable' error is displayed.

On 7 April, the National Payments Corporation of India (NPCI) tweeted that it is unaware of any crypto exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term using UPI.

source: Twitter

Coinbase responded to the NPCI with the following statement: "We are aware of the recent statement published by NPCI regarding the use of UPI by cryptocurrency exchanges. We are committed to working with NPCI and other relevant authorities to ensure we are aligned with local expectations and industry norms.”

At the time of writing, India-based users are unable to buy tokens via UPI (selling option is available). It is unclear whether it is related to a significant drop in crypto trading volumes following the 30% tax in India.

It has been reported that cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term volumes dropped by as much as 55% following the new crypto tax. Mobikwik wallet, which has partnered with many crypto exchanges announced it is terminating its e-Wallet services from cryptocurrency exchanges.

It is possible that due to the NPCI statement on 7 April, banks may be blocking transactions to Coinbase via UPI. It is still unclear at this stage why depositing via UPI is disabled at Coinbase while some suggesting it is temporary.

India Cryptocurrency Regulations

According to local reports in India, the government may not announce any form of regulations on cryptocurrencies until there is a global consensus.

The assumption is that India is waiting for Europe and the US to announce their framework for regulating cryptocurrencies. India's central bank (RBI) opposes cryptocurrencies, stating that they are a threat to financial stability.

However, India's court removed the restrictions that were imposed by the RBI in 2020 since India's crypto market spiked by +641% from July 2020 to June 2021. It has been suggested that local banks side with the RBI's views on cryptocurrencies.