Coinbase adds support for popular payment instrument UPI in India, making its eponymous cryptocurrency exchange functional for the first time in the world’s second-largest internet marketplace.

The listed company, which began testing UPI payments a few weeks ago, made the official launch at its first event in India on Thursday, saying it was working to expand its product offering in the country.

UPI, a payment infrastructure developed by a coalition of retail banks, has become the most popular way for Indians to transact online. Coinbase users in India will be able to deposit money into their accounts – and withdraw from them – using the UPI network, a company executive has said. To entice customers to try the Coinbase app, the company said it’s offering $2.65 to everyone who signs up.

The company notably did not disclose the names of its banking partners for the deployment of UPI payments. The vast majority of banks in India continue to sneer at crypto-related transactions, following the local central bank’s long-held views on virtual digital assets.

Even though India’s Supreme Court overturned the RBI’s ban on crypto two years ago and the country recently started taxing crypto transactions, banks still largely follow the central bank’s earlier direction. . RBI officials have publicly called for more scrutiny of crypto.

T. Rabi Sankar, Deputy Governor of the Reserve Bank of India, told an audience at a banking conference in February that cryptocurrencies were “specifically developed to circumvent the regulated financial system” and are only backed by no underlying cash flow.

“They have no intrinsic value; that they are akin to Ponzi schemes, and may even be worse,” he said.

“As a store of value, cryptocurrencies like bitcoin have yielded impressive returns so far, much like tulips in the 17th century Netherlands. Cryptocurrencies are very much like a speculative or gambling contract operating like a Ponzi scheme. In fact, it has been argued that the original scheme devised by Charles Ponzi in 1920 is better than cryptocurrencies from a social point of view,” he said.

Coinbase declined a request for an interview with its executives.

The arrival of Coinbase, which operates in dozens of markets, comes at an interesting time in India. Coinbase is already an investor in two of the largest local crypto exchanges in the country (CoinSwitch Kuber and CoinDCX).

New Delhi’s decision to start taxing crypto income in the country last week has prompted hundreds of thousands of people to scale back or stop crypto trading, according to people familiar with the matter.

Coinbase said it was taking a “long-term” bet on India. Brian Armstrong, co-founder and chief executive of Coinbase, said the company has already invested $150 million in Indian startups and plans to more than triple its workforce in the country to 1,000 this year.

FTX, a much younger crypto exchange and increasingly a major rival to Coinbase, has also started to expand its presence in India. The firm’s venture arm is engaging with a handful of startups in the country, according to a source familiar with the matter. He is also in talks to back Indian fantasy sports startup MPL, TechCrunch reported last week.