Coinbase’s Return to India

     After a wait of over two years, the global crypto exchange Coinbase has finally made its return to the Indian market by registering with India’s Financial Intelligence Unit (FIU). With direct support for the Indian Rupee (INR) and zero deposit fees, Coinbase is attempting to tap into India’s vast retail investor market. However, I suspect that this is, in reality, a business strategy designed to divert Indian capital towards US markets rather than fostering the domestic crypto space.

India’s Crypto Industry Plagued by Stringent Tax Regulations

     The biggest hurdle facing the Indian crypto market is the presence of some of the world’s most stringent tax laws. The 1% TDS (Tax Deducted at Source) levied on every single transaction has virtually eliminated active trading and intraday liquidity within India. Frustrated by these very regulations, I, too, eventually abandoned exchanges like Binance and KuCoin. Domestic exchanges such as WazirX and CoinDCX are often labelled as scams; yet, instead of enacting laws or regulations to curb these fraudulent activities, the authorities have effectively stifled serious trading — thereby preventing Indians — particularly those with disabilities — from utilising their skills to earn a livelihood through trading. In such an environment, Coinbase’s entry into India does not appear to offer any relief, even at first glance.

The Government Itself Is Laying the Trap for Tokenised Stocks

     Over the past two years, Coinbase must have thoroughly assessed and understood the state of crypto in India, as well as the operational landscape for international exchanges within the country. While India remains a massive market, revenue can now be generated primarily through long-term investors rather than through daily trading activities. Consequently, Coinbase’s true objective in this scenario is likely focused on tokenised stocks and the pre-IPO market. Thus, Coinbase stands poised to exploit the Indian market — and for this outcome, the Indian government itself will be to blame, having shown far greater interest in imposing its own arbitrary will than in safeguarding the country’s present and future interests.