Coinbase Considers Reentering Indian Market After 2023 Exit

Coinbase is considering returning to India after leaving the country in 2023. The company has started talking to India’s Financial Intelligence Unit (FIU) to understand the rules and make sure it follows them. This move comes as India continues to have strict laws for crypto companies from other countries.

The news comes after Coinbase’s Chief Legal Officer, Paul Grewal, joined a group that helps businesses in the US and India work together.

Coinbase Wants To Grow In India’s Crypto World

Grewal said he wants to support the new money ideas and bring the two countries closer. He also said India’s Web3 world is growing fast, with more builders, new businesses, and big companies joining in.

Since 2018, India’s Web3 developer community has grown rapidly. Today, Indian developers make up 12% of the world’s total Web3 developers. Grewal said no other country has seen such fast growth in this area.

Coinbase left India in September 2023. At that time, the company asked users to take out their money but did not explain why it was leaving.

Before that, in April 2022, Coinbase stopped using the UPI payment system just a few days after launching in India. This happened because the National Payments Corporation of India said it did not allow UPI for crypto payments.

If Coinbase starts again in India, it will enter a market with strict rules for foreign crypto companies. In late 2023, FIU placed restrictions on many foreign exchanges. However, in May 2024, Binance and KuCoin were allowed to operate in India after paying fines. Reports from September 2024 suggested that two more international exchanges were under review to see if they could start operating.

FIU-IND’s Role In Financial Regulation And Its Impact On Coinbase’s Return

The Financial Intelligence Unit – India (FIU-IND) is a part of the Indian government that looks at financial transactions and investigates illegal money activities. It works under the Prevention of Money Laundering Act, 2002.

FIU-IND started in November 2004 and reports its findings to the Economic Intelligence Council (EIC), which is led by the Finance Minister. The agency has 75 employees from different government departments.

These include the tax office (CBDT), the customs office (CBIC), and India’s big money boss (RBI). Some workers also come from the Securities and Exchange Board of India (SEBI), the Department of Legal Affairs, and intelligence agencies.

FIU is led by a senior official at the Joint Secretary level. Since May 2016, Pankaj Kumar Mishra, an IRS-IT officer from the 1989 batch, has been serving as its Director. In May 2020, he was promoted to Additional Secretary as a temporary upgrade to his position.

With India’s strict crypto regulations, Coinbase’s return will depend on how well it can work with FIU and follow local laws. As Binance and KuCoin have managed to find a way back into the Indian market, Coinbase might follow a similar path if it can meet regulatory requirements.