US crypto trading platform Coinbase is not accepting payments done through Unified Payment Interface, or UPI, in India at the moment while buying cryptocurrencies. The crypto exchange has put up a disclaimer saying that it has “temporarily" suspended purchases using the method, after the company came under NPCI lens for launching the service in India.
“Purchases with this payment method are temporarily unavailable," read a disclaimer at the Coinbase mobile app on Sunday.
Coinbase, the world’s largest cryptocurrency exchange, announced its entry to India on April 7, Thursday. Thereafter, it said it will allow its users to purchase cryptocurrencies through UPI system. This landed them in trouble with the National Payments Corporation of India, or NPCI, as the company came under the organisation’s scanner. NPCI, shortly after the launch, issued a clarification in which they said that “we are not aware of any crypto exchange using UPI".
Statement by NPCI as on 7th April 2022. With reference to some recent media reports around the purchase of Cryptocurrencies using UPI, National Payments Corporation of India would like to clarify that we are not aware of any crypto exchange using UPI. Please see attached document pic.twitter.com/lGTcaSLKeC
— NPCI (@NPCI_NPCI) April 7, 2022
“They (Coinbase) reached out to NPCI following the clarification. But it means little as clearly cryptocurrency is not a legal tender in India. A regulatory body like the NPCI will not approve it unless it is officially legal," Economic Times quoted a person aware of the matter as saying. Industry sources also told Moneycontrol that NPCI’s stance is that UPI does not support crypto purchases.
“Payment aggregators are partnering with exchanges and are operating through multiple merchant IDs (MID). Informally, they have been told about the current regulations, but there is business interest for them to process these payments for crypto,” ET further quoted the source as saying.
Coinbase Statement on UPI Payments
Shortly after the clarification issued by NPCI, Coinbase put out its own statement saying, “We are aware of the recent statement published by NPCI regarding the use of UPI by cryptocurrency exchanges. We are committed to working with NPCI and other relevant authorities to ensure we are aligned with local expectations and industry norms."
“As we enter the Indian market, we are actively experimenting with a number of payment methods and partners to enable our customers to seamlessly make their crypto purchases. One of these methods is UPI, a simple to use and rapid payment system," the Nasdaq listed company added.
NPCI directly monitors UPI payments in India and Coinbase came under the scrutiny of the organisation following its announcement. Following the clarification, banks had no choice but to stop UPI transactions on Coinbase. This comes at a time when the Centre is preparing FAQs regarding the cryptocurrency bill to regulate virtual assets in the country.
