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The US’s largest cryptocurrency exchange Coinbase will re-enter India after securing a key regulatory nod, in a sign of a thaw in the country’s hostility to digital coins following President Donald Trump’s strong support for the assets.
Coinbase on Tuesday said it had been given permission to register with India’s Financial Intelligence Unit, an anti-money laundering watchdog, and planned to start offering retail services later this year before branching out into “investment and products” in the world’s most populous nation.
Other major crypto exchanges, including Binance, have also recently registered with the FIU, after an Indian crackdown on offshore platforms allegedly violating local rules. John O’Loghlen, managing director for Asia-Pacific at Coinbase, said: “India represents one of the most exciting market opportunities in the world today.”
The move back into India marks a turnaround for Coinbase, which halted local operations in 2022 after what chief executive Brian Armstrong described as “informal pressure” from a central bank that has vehemently opposed the adoption of cryptocurrencies.
It also comes weeks after the US market regulator dropped a landmark lawsuit against Coinbase for allegedly violating American securities law, an agreement that was seen as an indicator of Trump’s friendlier approach towards crypto.
In 2018, the Reserve Bank of India ordered the country’s lenders to stop working with the crypto industry. While that directive was reversed by India’s Supreme Court in 2020, the central bank has repeatedly discouraged adoption of digital assets and voiced concerns over their widespread uptake, saying in December there were “consequences” for economic and financial stability.
“India is a unique market in the sense that the Supreme Court has ruled that they can’t ban crypto, but there are elements in the government there, including at Reserve Bank of India, who don’t seem to be as positive on it,” Armstrong had said, soon after Coinbase suspended operations there.
India’s regulation over digital coins remains opaque despite enthusiasm among young Indians for trading cryptocurrencies, an estimated $2.6bn market that is expected to grow about 18 per cent annually over the next eight years, according to research consultancy Imarc Group.
The crypto industry at one point splurged on advertising in India during popular televised cricket tournaments and paid for Bollywood star endorsements that largely glossed over trading risks and legal murkiness.
But after Trump took office, endorsing the cryptocurrency industry and launching his own memecoins, officials in New Delhi said they were drawing up a new framework to bring clarity to digital assets, which remain subject to a relatively high 30 per cent crypto capital gains tax and a 1 per cent transaction levy.
Despite the entrenched opposition of the RBI and inside parts of India’s government, “crypto as a technology deserves to be recognised and I think it cannot be denied”, said Deven Choksey, managing director of Mumbai-based investment advisory firm DRChoksey FinServ.
“You can’t prevent that which is a global phenomenon, but what you can do is you can regulate well.”
More widely, India’s government has been trying to appease the US by beginning to lower some of its major tariff barriers on goods such as imported bourbon whiskey and motorcycles.
Following Prime Minister Narendra Modi’s meeting with Trump in February, India’s commerce minister Piyush Goyal was in Washington last week for talks on a bilateral trade agreement.
