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 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 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.
