Coinbase Makes Strategic Return To India After Two-Year Exit, To Begin Cash-to-Crypto Purchases in 2026

Two years after Coinbase left India due to regulatory frictions and operational challenges with local payment systems, the exchange has made a strategic return. After a period of interaction with Indian regulators, Coinbase has reinstated the process of onboarding Indian users.

Coinbase Makes a Comeback To the Indian Market

The biggest exchange in the United States, Coinbase, was introduced to the Indian market in April 2022 as it targeted the growing community of crypto users. However, regulatory issues came very quickly. 

The platform has stopped accepting Unified Payments Interface (UPI) shortly after the National Payments Corporation of India (NPCI) distanced itself from the platform. By September 2023, Coinbase had ceased allowing Indian registrations and instructed current users to withdraw their funds. 

The company did not give up as it kept trying to regain its position in India. After actively engaging in consultation with Indian regulators to meet local compliance standards, Coinbase said in October that it was starting to accept Indian users back on the platform via an early-access program.

The app is now open to all, but Indian customers can only perform crypto-to-crypto transactions. Regulatory friction and high taxes notwithstanding, India presents a fast-growing market in terms of digital asset adoption, making it an appetizing market to Coinbase.

Coinbase Targets Cash-to-Crypto Purchases By 2026

At the India Blockchain Week, O’Loghlen stated that the firm will launch a fiat on-ramp in 2026, TechCrunch reported. The feature would allow users to add rupees to the app and buy digital assets therein, a feature that Coinbase dropped several weeks into its launch in 2022.

Coinbase’s re-entry into the Indian market follows new investment in India’s largest crypto exchange. The action was originally seen as a measure towards the streamlining of regulatory barriers. In mid-October, Coinbase said it was going to invest more in CoinDCX, the biggest Indian exchange, in a transaction worth the firm $2.45 billion.

It had also signed a memorandum of understanding with Karnataka state government last week to enhance the blockchain ecosystem and technical capacities of the state. The joint venture focuses on developer training, incubation of startups at the initial stages, and public awareness.

Why Exchanges Are Returning To the Indian Market

Besides Coinbase, there are other large global exchanges that have re-entered the Indian market as well. Bybit returned to India, fulfilling local registration services and paying a fine of $1 million. Binance also re-entered India last year after paying a fine of $2.2 million.

This strengthened move to operate in India is remarkable, as the country has one of the highest tax structures in the world. Exchanges are moving back to India with taxes of 30% on crypto gains and 1% on each transaction due to its high grassroots adoption and continued government interaction.

With the Indian government establishing itself as a key center of innovation for digital assets in the Asia-Pacific region, exchanges are exploring opportunities to take advantage of this innovation.