Cryptocurrency exchange Coinbase has officially launched its trading services in India and said that it will make “long-term” investments in the country, having already invested $150 million in Indian crypto and Web3 startups.
Coinbase said that it will allow Indian customers to purchase cryptocurrencies using the Unified Payments Interface (UPI), a payments infrastructure developed by a coalition of retail banks. UPI is now a digital payment mode which makes up 60% of retail payment volumes in India.
Coinbase is also offering $2.65 as an incentive to Indian customers to try the Coinbase app.
Coinbase CEO Brian Armstrong, who is in India to launch the service, said that the “customers can use UPI to directly buy crypto with INR on the app. As many as 157 crypto assets will be available to buyers on Coinbase app on Day 1.”
“We are investing significantly in India. This is my first visit to India and we will stick here as long as it takes. India is an important market for us. Some 180-190 million are underbanked in India,” Armstrong said during the launch event in Bengaluru.
Armstrong said that Coinbase was committed to working with the Indian bank partners, lawmakers, and regulators. The company has been engaging with the government at various levels.
The company also plans to hire 1,000 employees in India this year and is offering “remote-first” jobs where visiting the office for work will always be optional for the employees.
At present, the company has 300 full-time employees in India of which 30-35% are based in Bengaluru.
Coinbase, which is present in over 100 countries with an employee base of over 3,700, has 89 million verified users globally with quarterly traded volumes of $547 billion.
The Nasdaq-listed crypto asset exchange has commenced retail trading in India at a time when the segment is going through an uncertain regulatory environment. Crypto exchanges and investors are dealing with the impact of a hefty 30% taxation imposed by the Indian government on gains from virtual digital assets (VDAs), including crypto, which led to a massive drop in trading volumes
Additionally, a 1% tax deduction at source (TDS) will also be applicable on every crypto transaction from July 1. Market experts said that the TDS move is likely to drive volumes further down.
The governor of the Reserve Bank of India (RBI) had also said that private cryptocurrencies are a major threat to the country’s overall macroeconomic stability and will undermine the central bank’s ability to maintain financial stability. The RBI plans to launch its own digital currency, the digital rupee, sometime next year.
Pankaj Gupta, vice president of engineering at Coinbase, saadmittedid that the tax rate is high, but the company is looking at the long term.
“You know, we are not timing it. We were looking to get started and experiment just like any company which is already operational.”
As for the regulatory uncertainty, Armstrong said that crypto was met with scepticism and risk, “however, in the last 3-4 years regulators, and bankers have started seeing crypto as an opportunity.”
Coinbase’s corporate venture arm, Coinbase Ventures, already backs two of the largest local crypto exchanges in the country, CoinDCX and CoinSwitch Kuber.