Coinbase Re-enters India with Direct INR Bank Transfers via IMPS

Coinbase has activated direct Indian rupee bank transfers for users in India through the Immediate Payment Service (IMPS) network, allowing local customers to move funds between bank accounts and the exchange. The update, announced in a company blog post on May 31, marks the exchange's most substantive move in the Indian market since its failed 2022 entry.

Indian users now have access to spot markets, perpetual futures, and the Advanced Trade interface through a single platform. Coinbase says it has also built local INR order books to concentrate domestic liquidity alongside connectivity to its global exchange. This dual setup is designed to offer competitive spreads and faster execution for Indian traders, a significant upgrade from the previous reliance on crypto-to-crypto pairs or peer-to-peer methods.

Regulatory Foundation and Past Struggles

The launch follows Coinbase's registration with India's Financial Intelligence Unit in March 2025, which gave the company a formal regulatory foothold in the country and enabled it to offer crypto trading services under India's Anti-Money Laundering framework. This registration is critical: it allows Coinbase to operate within the legal framework, something that was absent during its earlier attempt.

Coinbase previously attempted to enter India in 2022, briefly enabling Unified Payments Interface (UPI)-based rupee deposits before suspending them within days. Payments authorities distanced themselves from crypto use of the UPI network, and partner services stopped supporting the integration, forcing the exchange to withdraw. The new IMPS-based approach avoids UPI entirely, using a more traditional bank transfer rail that is less likely to face regulatory pushback.

Competitive Landscape and Tax Challenges

The exchange is entering a market already served by domestic platforms including CoinDCX, CoinSwitch, ZebPay and WazirX. Global exchanges such as Binance and KuCoin are also active in India but have primarily relied on crypto-only or peer-to-peer rupee access rather than direct IMPS-based bank rails. Coinbase's direct fiat on-ramp gives it a potential edge in user experience, especially for newcomers who prefer bank transfers over P2P.

However, India imposes a 30% tax on most digital asset gains and a 1% tax deducted at source on certain transactions, creating a challenging environment for both users and exchanges. The high tax rate has dampened trading volumes across the Indian market, but Coinbase's regulatory compliance may attract users who prioritize safety over tax avoidance.

Vietnam, another high-adoption market, is moving in a different direction. The country's Ministry of Finance has proposed allowing SMEs to use digital assets as collateral for bank loans, a move that could further integrate crypto into the formal economy. Vietnam ranks fourth in Chainalysis' 2025 Global Crypto Adoption Index, behind India, the US, and Pakistan, highlighting the growing importance of Asian markets for crypto adoption.

Coinbase's re-entry into India with IMPS-based transfers is a calculated bet on regulatory compliance and user experience. By sidestepping UPI and building local order books, the exchange aims to capture a share of India's crypto-savvy population, despite the tax burden. Whether this strategy will succeed where the 2022 attempt failed remains to be seen, but the regulatory groundwork is now in place.

Key Takeaways

1. Coinbase enables direct INR bank transfers via IMPS, offering spot and futures trading with local order books.
2. The move follows FIU registration in March 2025, providing a regulatory foundation absent in 2022.
3. India's 30% crypto tax and 1% TDS remain hurdles, but Coinbase's compliant approach may attract risk-averse users.
4. Vietnam's proposal to accept digital assets as loan collateral signals a contrasting regulatory trend in Asia.

Sources: Coinbase India Rupee Bank Rails, Vietnam Digital Assets Loan Collateral