Coinbase Registers with FIU, Set to Relaunch Crypto Trading in India

Global cryptocurrency exchange Coinbase has officially registered with India’s Financial Intelligence Unit (FIU) as part of its second attempt to enter the Indian market. The exchange plans to launch crypto trading services later this year, marking its comeback after regulatory challenges forced it to suspend services in the country in 2023.

Coinbase’s Return: A Second Attempt at Indian Expansion

• Coinbase initially launched in India in April 2022, but soon faced regulatory pressure, especially over Unified Payments Interface (UPI)-based transactions, which led to the suspension of its services.
• In September 2023, it announced it was discontinuing services for Indian customers, requiring users to withdraw funds by October 31.
• Now, Coinbase has registered with the FIU, allowing it to resume operations in compliance with local regulations.

John O’Loghlen, Regional Managing Director for APAC at Coinbase, emphasized India’s strong on-chain developer community and its emerging status as a global technology hub, making it a key market for Coinbase’s international expansion.

Why India? A Booming Crypto Market Amid Regulatory Clarity

According to Coinbase’s blog post, India has:

• A rapidly growing blockchain developer ecosystem (global share grew from 3% in 2018 to 12% in 2023).
• A vibrant startup culture that aligns with Coinbase’s goal of empowering local entrepreneurs to innovate and scale globally.
• A clearer regulatory landscape, as the Indian government cracks down on non-compliant exchanges while setting the stage for structured crypto regulation.

Regulatory Challenges and the FIU Crackdown

India’s crypto market faced a regulatory shake-up earlier this year, with the FIU banning several offshore exchanges, including Binance, KuCoin, OKX, and Huobi, for not complying with anti-money laundering rules.

By registering with the FIU, Coinbase ensures its operations align with Indian regulations, potentially giving it a competitive edge over rivals still struggling with compliance.

What This Means for Indian Crypto Traders

• Coinbase will relaunch with retail trading services, offering a compliant and secure platform for Indian users.
• The exchange is likely to introduce INR-based trading, although details about UPI integration and banking partnerships remain unclear.
• Increased competition in the Indian market could lead to better services and lower fees for traders.

Indian Crypto Exchanges: Unfazed by Competition

With major global players like Binance and Coinbase re-entering the Indian market, domestic exchanges like CoinDCX and Mudrex welcome the competition, believing it will expand the market and push for more regulatory clarity.

Sumit Gupta, CEO of CoinDCX, stated that while global exchanges may set the groundwork, Indian exchanges will dominate the market in the long run due to their deeper understanding of local regulations and consumer preferences.

The Future of Crypto in India

With Donald Trump’s pro-crypto stance fueling optimism in the global market and India emerging as a key player in blockchain innovation, Coinbase’s return signals growing opportunities in the country’s crypto ecosystem. However, challenges remain, particularly in ensuring seamless banking access for crypto transactions.

The coming months will be crucial for Coinbase and other exchanges navigating India’s evolving crypto regulatory framework.