As Coinbase meets with Indian lawmakers, you might wonder how these discussions could shape the future of crypto regulation in India. The conversations suggest a cautious approach, balancing innovation with the need for oversight. With Coinbase recently registering with India’s FIU, the moves signal a shift toward transparency and compliance. But what specific policies could emerge, and how will they impact the broader market? The answers could reveal more than you expect.
As Coinbase reconnects with Indian lawmakers, the company’s efforts to re-enter the market are gaining momentum. Recently, Coinbase secured registration with India’s Financial Intelligence Unit (FIU) on March 11, 2025, a crucial step that allows it to operate legally within the country. This registration means Coinbase now complies with India’s Prevention of Money Laundering Act (PMLA), classifying the platform as a reporting entity under India’s anti-money laundering (AML) framework. This compliance also demonstrates Coinbase’s commitment to transparency and adherence to international AML standards, which are increasingly important for global trust and legitimacy.
Coinbase’s recent FIU registration marks a key step toward legal re-entry into India’s evolving crypto market.
With this compliance, Coinbase is positioned to relaunch its cryptocurrency trading services in India, signaling a significant shift from its previous exit in September 2023. The registration underscores Coinbase’s commitment to adhering to strict AML and counter-terrorist financing laws, which are vital in a regulatory landscape marked by ambiguity and stringent rules.
Your role in this evolving landscape is pivotal. The company’s initial market entry in April 2022 saw Coinbase support crypto purchases via UPI payments, a popular Indian payment method. However, the National Payments Corporation of India (NPCI) denied awareness of these transactions, leading to regulatory pushback. This resulted in Coinbase’s suspension of UPI services and ultimately its full exit from India’s market.
The exit was driven by hurdles such as a 30% tax on crypto profits and a 1% tax deducted at source (TDS) on all transactions, which made operational viability challenging. These tax measures reflected India’s attempt to regulate crypto as an asset class, but they also contributed to increased scrutiny and a murky legal environment. The regulatory uncertainty remains a significant obstacle for Coinbase and other exchanges, discouraging broader adoption and investment.
Now, with FIU registration, Coinbase joins local competitors like CoinDCX, Binance, and KuCoin, all of which have also registered as reporting entities to comply with AML rules. Some platforms, such as Bybit, faced penalties for non-compliance, highlighting the importance of regulatory adherence.
As global exchanges eye India’s large, youthful population and rising crypto interest, the competition intensifies. Compliance with India’s complex tax regime, which includes a 30% tax on earnings and TDS on trades, is essential for maintaining a foothold. While the government recognizes crypto as an asset class, ongoing regulatory volatility and uncertainty about potential future bans keep operational risks high and investor sentiment cautious.
For Coinbase, India remains a key strategic market. The country’s demographic trends and economic ambitions make it one of the most promising opportunities worldwide. Coinbase plans to introduce retail crypto trading services later in 2025, with further product launches to deepen its market presence.
These efforts will align with ongoing regulatory compliance, ensuring they meet the legal and tax requirements. The company’s investments aim to expand its operational footprint, positioning itself as a major player in India’s evolving crypto landscape.
As Coinbase advances its discussions with lawmakers, it’s clear that the company recognizes India’s potential and is committed to navigating its regulatory environment to establish a lasting presence.
