Coinbase's India return: How a bespoke rupee on-ramp changes the game for foreign exchanges

In April 2022, Coinbase’s initial push into India hit an immediate wall when local payment-access rails collapsed just days after launch, forcing a swift suspension of retail trading. Today, the global crypto giant is executing a carefully orchestrated comeback, this time with a completely overhauled playbook.

Operating under a fresh local entity fully registered with India's Financial Intelligence Unit (FIU-IND) and compliant with local tax frameworks, Coinbase has achieved a major competitive breakthrough: a custom-built, bespoke Indian Rupee (INR) on-ramp and off-ramp.

While international platforms have historically forced Indian users onto complex peer-to-peer (P2P) networks or restricted them to crypto-only transfers, Coinbase’s direct integration with Indian banking rails allows seamless top-ups and withdrawals in local currency. As the only non-Indian exchange currently offering fully compliant, direct INR rails, Coinbase’s renewed push isn't just a re-entry but establishes a new benchmark for how foreign Web3 companies must navigate India’s strict regulatory landscape to tap into a potential 100-million-user market.


Edited excerpts from a chat with John O'Loghlen, Managing Director APAC, Coinbase:

Coinbase’s first India rollout in 2022 ran into payment-access problems within days, and retail trading was subsequently suspended. What has fundamentally changed in Coinbase’s regulatory engagement, banking relationships and operating structure to ensure the IMPS rails remain durable this time?

One thing that never changed is that we have always had big teams in India. Those teams are driving the India launch for the consumer app, but they also work on global product, cybersecurity, AI and other areas. So we will continue to invest in India. We also have Coinbase Ventures investments here.

I think we have investments in other exchanges in India, so it is certainly a priority market and we are thoroughly committed. The market is quite different from when we were here in 2022. Since that time, we have offboarded all of our historical customers and started with a new entity, Coinbase India. We have now onboarded customers under a structure that is fully compliant with local taxation rules and the governance and guidance of the FIU and Ministry of Finance.

We have full boots on the ground here, with local marketing, local growth, local legal and compliance, finance and other functions. All the cross-functional roles within international are filled on the ground and form part of Coinbase India.

Another important feature is our fiat offering. We have on-ramp and off-ramp fiat using Indian rupees. That is a unique offering among international exchanges in India.

No other non-Indian exchange currently offers that. It is a bespoke technology built for India that, again, complies with all the regulations. Previously, our customers could only really put digital assets into the platform or into an account that they held elsewhere.

But now, if you are new to crypto or digital assets, you can top up with rupees and use them to buy digital assets. That is quite a major move for us. We are very excited about a roadmap that unlocks a lot of what we call the everything exchange.

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India’s crypto tax framework remains a material friction point for traders. Can the Indian market scale meaningfully without a more competitive tax regime?

I think a number of products and sectors here are taxed quite significantly. We are optimistic and hopeful that, over time, that burdensome tax rate will be reduced. Together with a number of players in the industry and the Indian Web3 Association, we have had quite a few conversations with the tax authorities about that.

I think there is an outlook in which that possibly changes. I do not think it is a deterrent for the entire market. People who are not comfortable with it are probably going offshore anyway, or to Dubai or somewhere else.

But there is still a large population here. We also see new cohorts, such as the F&O audience, who are happy to take their investment strategy and thesis and seek exposure to digital assets and use stablecoins. In other markets, when regulation evolves and there is some maturity and a roadmap for digital asset regulation, tax is usually addressed as well.

If I look at Australia, for example, four years ago there was no digital asset regulation. They had a similar situation, where you register with AUSTRAC, much like with the FIU. The first step is always CTF and AML - counter-terrorist financing and anti-money laundering - tracking the transactions and making sure they are legitimate and that there are no nefarious users.

The next step is taxation. Then you have draft legislation and specific regimes for digital assets and stablecoins. In Australia, we lobbied quite seriously and worked with stakeholders across fintech, banking and Web3, and it took some time.

But in the last 18 months, Australia has gone from being a laggard in digital asset regulation to being a leader. Quite quickly, you can play catch-up. We hope to speak to various stakeholders and parts of the government here and show them what best practice looks like in the US, under MiCA in Europe, under VARA in Dubai, where we are registered, and under MAS in Singapore and ASIC in Australia. We want to bring those lessons and help regulators find a regulatory roadmap and guardrails that are right for India and protect Indian consumers. We really lean in on regulation and taxation.

We want to bring that global experience and believe things will become brighter and brighter in that regard.

How much growth are you expecting from the India market? When does Coinbase expect India to become a material contributor to its APAC business?

Initially, the low-hanging fruit is clearly existing traders. We are already, I believe, getting some good positioning there, although we still have a lot of work to do.

We are bringing that technology into our platform. It will offer a more advanced trading platform with more features and functionality, which we believe more professional traders and investors are interested in.

I think the F&O market and the traditional brokerage and finance market are interesting because those people want to take, as I said before, their skill sets, technologies and strategies and bring them into Bitcoin and Ethereum, see how they can use stablecoins, and look at those products and long-tail tokens. After 18 to 24 months, you really see dovetailing with, hopefully, some draft legislation. We can then talk about more of a mass-market approach to more people across a very large audience in India.

According to your internal estimates, how big is the crypto market in India? Is it only the small investors or the big boys who are also showing enough interest?

The number-one player, CoinDCX, has publicly reported more than 20 million customers. They are the North Star.

In a number of years, we would like to be in a leading position in the market, and I think that number should have grown by then. That is the current size for the number-one player, which does not have a majority share. So you can infer that it is probably a 100-million-active-user market.

In terms of grassroots crypto adoption, India is number one. Some estimates are showing 119 million to 120 million users, and I think that is meant to quadruple in the next decade.

There is pretty high percentage growth in terms of adoption. I think there is a broadening of adoption beyond the metros. Forty-one percent of investors identify as long-term buy-and-hold investors.

Forty-nine percent keep crypto exposure below 10% of their portfolio. Women have quite a strong preference - probably 46% of women versus 40% of men, according to reports.

Over time, Tier-2 and Tier-3 cities have become important. Our initial trading competition and trader engagement are focused on the usual suspects you would expect.

Delhi, Mumbai, Hyderabad, Bengaluru, Ahmedabad, Kolkata and Chennai - all the usual destinations with dynamic users, money and wealth, where people have already been trading. But there are other cohorts that are really important.

Family offices are a very attractive cohort. They have more of a traditional finance experience with ETFs, mutual funds, equities, gold, other currencies and commodities. The F&O market is obviously much bigger.

You also have a lot of young professionals in technology who are driving their own education around financial wellness. They want to be interested in as many products as they can and want access to SpaceX pre-IPO allocations.

You can do that with Coinbase. It may be quite hard for them to get those allocations in the US market, which is quite active right now and quite strong compared with other global markets.

We want to be able to unlock those products for a much bigger audience.

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Besides small retail investors, how big an opportunity do you think family offices could represent in India? The number of family offices has grown substantially over the last three or four years, and all of them are investing in equities, gold and other commodities, as you mentioned.

What we typically see in other markets - and I would say Asia, particularly Singapore and Hong Kong, is quite advanced in this area - is a more web-native presence in the family-office world. In India, younger family offices and next-generation family members are usually given some money to test a product.

If they are successful, they are given a bigger pool of money. That diversification and allocation can change quite quickly if they are successful.

There is a portion of the broader family-office set that is very tech-savvy and very tech-forward, blockchain-forward and AI-forward. They are already doing things that overlap significantly with this space. They may be investing in agentic commerce, AI trading bots or APIs, or may have investments in stablecoins or remittance businesses.

When a family office has that overlap and familiarity with Web3 and digital assets - perhaps from time spent at university overseas or because it has invested in Web3 projects here - those are the people who will look at digital assets. They are probably the people who will gravitate towards Coinbase in terms of trust and reputation. If you are a family office, you are going to have a proper audit, an investment committee and a board of directors.

You probably have the kind of compliance and governance rubric and guardrails that would lead you to say: If I am going to do this properly, I am going to do it with Coinbase.

We have Base, our Layer 2 Ethereum blockchain, which is very popular in India and is a rising player in the space. It is the number-one Layer 2 blockchain globally, and it also has lots of projects here. When high-net-worth individuals back those projects, they are the people who are likely to look at digital assets.

Crypto adoption is typically believed to be higher for those in their twenties. Is it the same globally and in other Asian peers? How big is this Gen-Z cohort for you in India?

We have a strong demographic in that cohort across all markets. It is possibly particularly significant in India, which I think is the future - the future investor base.

They are going to do things differently and demand more financial freedom than older generations because they are not used to being left out. They do not want to be left out. But we have cohorts from all generations.

We have a lot of boomers who are being told by the younger generation: I am being priced out of housing. There is too much inflation in property. I am never going to have an apartment or property.

Why do you not take some of the inheritance, diversify it and put it into a digital asset with a long-term return? Looking at historical returns, it is going to be multiples higher than any other asset class.

You also have the young professional base, which is quite skewed towards women and really wants to drive its own financial education. They are learning about ETFs, getting access to private-equity funds, US equities and digital assets. They are trying to understand what stablecoins are and how they can help with remittances.

That group is independently educated as well. It includes Indians with MBAs and young couples who are not necessarily going to use an investment adviser. That is another big cohort, and it is very exciting here as well.