The Reserve Bank of India (RBI) has not issued any instruction to Coinbase to suspend UPI-based transactions, according to sources in the know. The crypto exchange’s chief executive officer Brian Armstrong said on an earnings call on Tuesday that the company ended up disabling UPI because of some informal pressure from the RBI. The central bank is yet to issue an official statement on Armstrong’s comments.
An RBI injunction against UPI use for crypto transactions would be potentially violative of a Supreme Court order striking down an RBI circular halting crypto exchanges’ access to banks.
“The RBI has not done anything or issued any instruction which goes against the Supreme Court order. The RBI in its circular dated May 31, 2021, had stated that in view of the order of the Hon’ble Supreme Court, the circular of April 6, 2018, which had imposed certain restrictions on regulated entities in dealing with virtual currencies, is no longer valid from the date of the Supreme Court judgement,” the source said.
Coinbase had launched crypto trading services in India on April 7, 2022, and said that Indian users would be able to transact on its platform using UPI. National Payments Corporation of India (NPCI), which operates the UPI platform, had issued a statement the same day that it was unaware of any crypto exchange using UPI. Soon after, Coinbase was reported to have suspended transactions using UPI.