The National Payments Corporation of India (NPCI) has denied that it authorized Coinbase’s united payments interface (UPI) cryptocurrency feature only days after introducing it in India.
Coinbase has announced that the company is withdrawing the system having only launched the partnership with NPCI on April 7.
Following the launch, NPCI released a message claiming it did not know of any collaboration or a crypto exchange authorized to use UPI.
This was followed by another statement by Coinbase: “We are aware of the recent statement published by NPCI regarding the use of UPI by cryptocurrency exchanges. We are committed to working with NPCI and other relevant authorities to ensure we are aligned with local expectations and industry norms.”
Reticence by NPCI is not exactly surprising as it works under the Reserve Bank of India (RBI) which has been highly skeptical of the rollout of cryptocurrencies in the country. RBI even insisted on a blanket ban on cryptocurrencies arguing that they were dangerous to the public.
Still, the abrupt launch and suspension of the UPI crypto feature remains ill-defined as both the NPCI and Coinbase are speaking at cross-purposes where neither has acknowledged what made a miscommunication of this scale possible.
According to The Economic Times, NPCI would not approve using UPI unless it’s officially legal to own and trade crypto.
While the bizarre situation will probably be clarified in the foreseeable future, it’s strange for Coinbase to launch a product which turns out to not be endorsed by one of the purported partners.