Nasdaq-listed US cryptocurrency exchange Coinbase has commenced retail trading in India. This comes when crypto exchanges and investors are dealing with the impact of a hefty 30 percent taxation imposed by the government on gains from Virtual Digital Assets (VDAs), including crypto.
The announcement comes after the company has already invested $150 million in the country’s crypto and Web 3.0 startups.
The exchange will allow customers to purchase cryptocurrencies using the Unified Payments Interface (UPI), a payments mode that makes up 60 percent of retail payment volumes in the country.
At the company’s event, Brian Armstrong, CEO of Coinbase, said, “We are investing significantly in India. This is my first visit to India, and we will stick here as long as it takes.”
On the company’s timing of commencing trading while the taxation has impacted trading volumes, Pankaj Gupta, Vice President of Engineering at Coinbase, said, “The numbers (tax rate) is high…but we are looking at the long term and not an opportunistic time. You know, we are not timing it. We were looking to experiment just like any already operating company.”
Coinbase’s Chief Product Officer, Surojit Chatterjee, said that the company is looking at its presence in the country with a long-term view of 10 to 20 years.
Chatterjee added that the company has engaged with the government at various levels, although he did not reveal the nature of the discussions.
“Crypto is complex. It takes several conversations to educate and understand the implications and how the technology can benefit India. That’s the important point. And we have to be engaged in those conversations,” he said.
“We want to listen and learn from the community from the other developers. And also, of course, from the government and regulators in a positive way. We are taking a very long-term view. That’s what we have always done globally,” he added.
According to the taxation announced in the budget, a 1 percent tax deduction at source (TDS) will also be applicable on every crypto transaction from July 1, which is expected to drive volumes down and discourage investors further.
Meanwhile, the Reserve Bank of India (RBI), too, has maintained a stance of imposing a ban on crypto trading, with Governor Shaktikanta Das saying that they have no underlying value, ‘not even a tulip’ he had said.
Coinbase has hired 300 employees in India and plans to hire 1,000 more in 2022. Its investment arm Coinbase Ventures, has also invested in India’s only two unicorn crypto exchanges – CoinSwitch and CoinDCX.
Coinbase has 89 million verified users globally with quarterly traded volumes of $547 billion. The company is present in over 100 countries with a team member base of over 3,700.