Coinbase's CEO has finally spoken about the recent events in India that caused them to pause trading services for nearly a month. He said it was due to "informal pressure" from the Reserve Bank of India's (RBI) informal demands.
When the company launched its eponymous crypto trading service in India to much fanfare on April 7, it was clear that this would not be just another failed venture for them.
The app allowed users of the world's second-largest internet marketplace (after China) and home base for many startups to purchase tokens using UPI which is a wildly popular Indian payment infrastructure built by banks along with other retailers. But just three days after launching its eponymous service, the Nasdaq-listed company issued an unexpected cancellation notice without any warning or explanation given to customers.
This move happened after the National Payments Corporation of India, which operates under the country's central bank and handles transactions for rectifying financial inclusion efforts with its digital payment system UPI refused to support Coinbase apps.
When asked about the Indian episode of Coinbase's earnings call, co-founder and CEO Brian Armstrong said they disabled UPI "due to informal pressure from The Reserve Bank Of India."
Armstrong pointed out that this cryptocurrency can be traded like any other stock or currency and doesn't have an adverse effect on financial markets as some people may think.
"Cryptocurrency trading is not illegal in India, but there are those within the government who don't seem too keen on it. And so they're trying to apply pressure behind-the-scenes by disabling some of these payments using UPI or any other system that might be used for cryptocurrency transactions," he said.
Amstrong continued "The Reserve Bank of India's action may in fact be a violation on their part, but I think our preference has always been to work with them and focus more towards recovery. There are many avenues that need revival through other payment methods; this is one option we'll explore first before anything else."
The Reserve Bank of India's ban on cryptocurrency has been a topic of debate in the country since it was lifted more than two years ago. The Reserve Bank of India previously banned cryptocurrency – a decision thankfully Overturned by the country's top court more than two years ago.
However, they still continued to push banks not to engage in cryptocurrency exchanges. This could potentially lead some entrepreneurs into failed projects due to a lack of support from financial institutions like shareholders' demand?
This pressure – and bank compliance – is the major reason why popular cryptocurrency exchanges in India periodically face issues supporting fiat currency in the country.
Crypto players in India are hoping that the country's Central Bank will ease its stance on cryptocurrency soon. The executive at one of these exchanges told reporters he could also challenge this action legally, but warned them about how long such a court battle might last and what could happen if it went against him or his company during those years while they were waiting for results from legal proceedings- so instead; crypto enthusiasts aim to negotiate with authorities themselves before taking any steps forward which would likely result in either way: relief coming sooner rather than later!