Coinbase’s Return And Its Impact On India’s Crypto Investors

Coinbase's return to India represents a significant shift in the country's cryptocurrency environment. Now registered with the Financial Intelligence Unit (FIU), its return might improve investor confidence, attract global companies, and influence market trends.

What’s Different Now

In April 2022, Coinbase launched in India with UPI support for crypto transactions. However, the NPCI quickly denied any knowledge of cryptocurrency exchanges that used UPI, which resulted in the suspension of rupee deposits. Its operations were further limited by regulatory uncertainties, which ultimately led to a near-complete withdrawal.

This time, Coinbase has secured approval from India’s Financial Intelligence Unit (FIU), which monitors compliance under the Prevention of Money Laundering Act (PMLA), 2002. The exchange can now legally function in India with FIU registration, which signifies a more organized return. It wants to compete with CoinSwitch and CoinDCX, two well-known cryptocurrency exchanges in India.

What It Means for Indian Investors

Coinbase’s return could signal renewed momentum for India’s crypto market. FIU registration might also attract other global exchanges, increasing competition and improving services also ensure compliance and secure platforms.

John O'Loghlen, Regional Managing Director for APAC at Coinbase, stressed that India is among the most thrilling market opportunities in the world. He pointed out that Coinbase is dedicated to growing in markets that understand the promise of crypto and onchain innovation. He also expressed pride in deepening their investment in India while ensuring full compliance with local regulations.

While the market outlook seems positive Thangapandi, CEO of Koinpark, advises caution.

He said, “While Coinbase’s return offers Indian investors another platform to consider, the fundamental challenges remain unchanged. High taxes, strict regulations, and banking limitations still impact profitability, with the 30 per cent tax on gains and 1 per cent TDS acting as significant barriers. Simply chasing new platforms isn’t the solution. Smart investors should focus on security, compliance, and liquidity, and understand that real change will come not from new entrants, but from better policies that empower investors.”

Will It Revive India’s Crypto Market

As India adapts to global trends, Edul Patel states the growing trust in the country's cryptocurrency industry.

Edul Patel, Co-founder & CEO of Mudrex said, “The return of Coinbase to India highlights the growing confidence in the country’s crypto market. India has consistently ranked among the top nations in grassroots crypto adoption, making it an attractive destination for global players. The market’s maturity, coupled with improving regulatory clarity, has encouraged major exchanges to establish or re-establish their presence here.”

According to Reuters, a senior official informed them last month that India is reevaluating its stance on cryptocurrencies in response to global regulatory shifts, with recent policy changes in the U.S. having a significant influence.

While Coinbase’s presence could encourage more global players to enter, the real shift in India’s crypto market will depend on policy changes that support long-term growth.