Coinbase Returns to India After 2-Year Pause, Fiat Access Coming 2026

Coinbase has reopened registration in India following a two-year operational hiatus, marking the crypto giant’s return to the world’s second-largest internet market with plans to introduce fiat currency integration by 2026.

The exchange currently offers crypto-to-crypto trading while working toward full-service restoration, which will allow Indian customers to deposit rupees and purchase digital assets directly on the platform.

The San Francisco-based company first entered India in April 2022 but was forced to suspend operations within days after the National Payments Corporation refused to recognize its use of the Unified Payments Interface.

By September 2023, Coinbase had withdrawn entirely from India, requiring existing customers to liquidate their holdings and transfer funds elsewhere.

Strategic Compliance Gamble Pays Off

Coinbase’s willingness to completely exit the market represented a significant commercial risk, John O’Loghlen, the exchange’s Asia-Pacific regional director, told TechCrunch.

Speaking at India Blockchain Week, O’Loghlen explained that forcing existing customers to close their accounts ran counter to typical business strategy but established a clean regulatory slate.

The company subsequently engaged with India’s Financial Intelligence Unit throughout 2024, securing approval for registration and launching early access in October before expanding to general availability.

The exchange now joins other global platforms like Binance, KuCoin, and Bybit in receiving Financial Intelligence Unit authorization.

These competitors faced similar regulatory obstacles after the government agency cracked down on offshore exchanges in January 2024 for violating anti-money laundering provisions, blocking their websites, and removing their applications from digital storefronts.

Most secured compliance approvals and paid substantial penalties to resume operations.

Coinbase has simultaneously deepened its financial commitment to the Indian market by investing additional capital in local exchange CoinDCX at a $2.45 billion valuation.

The American firm employs over 500 people nationwide. It continues hiring for positions serving both domestic and international operations, while chief legal officer Paul Grewal recently joined the U.S.-India Business Council board to strengthen bilateral commercial relationships.

Tax Structure Creates Operational Headwinds

India’s cryptocurrency taxation framework remains among the world’s most punitive, imposing a 30% levy on profits without allowing traders to offset losses against gains.

The government additionally deducts 1% from every transaction, discouraging frequent trading activity and pushing an estimated 90% of Indian crypto volume to offshore platforms.

When combined with mandatory surcharges and additional fees, the effective tax burden reaches 42.7% for high-income traders.

O’Loghlen acknowledged these fiscal barriers while expressing hope that authorities will eventually ease restrictions to make digital asset ownership less burdensome.

The Reserve Bank of India has consistently opposed cryptocurrencies, citing concerns about macroeconomic stability, financial system risks, and vulnerabilities to money laundering.

A recently disclosed government document revealed that Indian officials remain reluctant to implement comprehensive crypto legislation, fearing that formal recognition might encourage mainstream adoption and create systemic financial exposure.

Despite these regulatory headwinds, India consistently ranks among the top countries in global crypto adoption indices, with citizens holding approximately $4.5 billion in digital assets.

Tax authorities have recently intensified scrutiny, investigating over 400 high-net-worth individuals suspected of evading payment obligations through peer-to-peer transactions on platforms like Binance and demanding regional office reports by mid-October.

Building Trust Through User Experience

Coinbase aims to differentiate itself through security and accessibility, according to O’Loghlen, who emphasized the need for intuitive interfaces comparable to popular Indian consumer applications.

“We want to be known as that trusted exchange, ensure that your funds are safe with us,” he stated.

“We’re not going to get out to the masses if you can’t have a really nice UI, a trusted experience that allows you to onboard in a matter of minutes.“

The company’s return coincides with India’s emergence as a major blockchain development hub, with its share of global Web3 developers growing substantially in recent years.

However, the operational environment remains complex, as government officials continue promoting the Reserve Bank’s digital rupee while heavily taxing private cryptocurrencies that lack sovereign backing.