Coinbase debuts crypto trading in India

The world's second largest internet market for the first time will be able to support the popular UPI payment instrument, thanks to the addition of support by Coinbase.

The publicly listed firm, which began testing UPI payments a few weeks ago, made the official launch at its maiden event in India on Thursday.

UPI is a payments infrastructure developed by a coalition of retail banks. Users in India will be able to top money and withdraw it from their accounts using the UPI network, a company executive said. Everyone who signs up for the Coinbase app will get $2.65 in exchange for doing so.

The company did not reveal the names of its banking partners. The local central bank's longstanding views on virtual digital assets have led the majority of banks in India to refuse to deal with such transactions.

The Supreme Court of India overturned the ban of the Reserve Bank of India oncryptocurrencies two years ago, but banks are still following the central bank's instructions. The officials of the Reserve Bank of India have called for more scrutiny.

The deputy governor of the Reserve Bank of India said at a banking conference in February that cryptocurrencies have been specifically developed to circumvent the regulated financial system and are not backed by any underlying cash flow.

He said that they are akin to Ponzi schemes and may even be worse.

As a store of value, cryptocurrencies have given impressive returns so far, but so did tulips in the 17th century. Cryptocurrencies are very much like gambling contracts and Ponzi schemes. It has been argued that the original scheme devised by Charles Ponzi in 1920 is better than cryptocurrencies.

A request for an interview with its executives was declined.

There is an interesting time in India with the arrival of Coinbase. Two of the largest local exchanges in the country are owned by Coinbase.

Hundreds of thousands of people have stopped trading incryptocurrencies because of New Delhi's move to tax them at 30%.

It is making a long-term bet on India. The firm has already invested $150 million in Indian startups and is planning to more than triple its headcount in the country to 1000 this year.

FTX has begun to expand its presence in India. A source familiar with the matter says that the firm's venture arm is engaging with a few startup in the country. The Indian fantasy sports startup MPL is in talks with it.