Coinbase in talks about re-entering the Indian market
American publicly-listed crypto exchange platform Coinbase is understood to be in talks with Indian regulators with a view towards enabling the re-entry of the exchange into the Indian market.
News of the development emerged via a TechCrunch report published on Feb. 13. The publication cited two anonymous sources familiar with the matter. According to those sources, the American crypto exchange platform is in talks with officials from India’s Financial Intelligence Unit (FIU), a government agency that collects financial data regarding offenses under India’s Prevention of Money Laundering Act.
Regulatory pushback
The FIU has been a key player in pushing back against exchanges that it believed were non-compliant in participating within the Indian market over the course of the past two years.
In December 2023, the government agency moved to block overseas exchange businesses that it deemed to be operating illegally within the Indian market from engaging with Indian investors. That action was taken following calls from native Indian exchanges for a level playing field. At the time, they made the case to the Indian authorities that offshore exchanges were not operating in compliance with local regulations.
Show-cause notices were issued against nine platforms at that time, although Coinbase wasn’t one of them.
The company had taken the measure of disabling new user sign-ups in India in September 2023. Prior to that, Coinbase CEO Brian Armstrong had complained about “informal pressure” being exerted by the Royal Bank of India (RBI). He said that the central bank was exerting “soft pressure” behind the scenes.
On this attempt to re-enter the market, a spokesman for the company made the following statement to Cointelegraph:
“Coinbase is excited by the opportunities in the Indian market and intends to comply with applicable regulatory requirements, but we have nothing to announce regarding a FIU registration at this time.”
Kyle Chasse, founder of Web3-focused venture capital firm MV Global, outlined on X that it was “massive news,” adding that if the company re-enters the market, “huge liquidity could flow in from this.”
Local partners
A source familiar with the matter told Decrypt that Coinbase wants “to do the same thing this time, but with local partners on board and a more clear strategy, which they didn’t have last time.”
The publication suggested that Coinbase executives will visit India in March to attend meetings with FIU officials. The timing of any official service re-launch in India will depend upon the regulatory steps that need to be followed by the company and the time taken to accomplish these requirements.
In a related development, last week, Coinbase’s Chief Legal Officer (CLO), Paul Grewal, joined the board of directors of the U.S.-India Business Council, part of the U.S. Chamber of Commerce. While commenting on the appointment, Grewal spoke about a number of positive developments in India that are likely factors in the company’s renewed efforts to re-enter the Indian market. He stated:
“India has one of the largest and fastest-growing web3 ecosystems in the world, with a booming developer community, pioneering startups, and bold institutional adoption. Since 2018, its share of global web3 developers has quadrupled to 12%, the highest growth among emerging markets.”
