Cryptocurrency exchange Coinbase has registered with India’s Financial Intelligence Unit (FIU), allowing it to operate legally within the country’s regulatory framework. This development comes as Indian authorities tighten oversight on digital asset platforms, requiring compliance with anti-money laundering (AML) and financial reporting obligations.‍

Regulatory Approval and Compliance

With the FIU registration, Coinbase gains approval to offer crypto trading services in India, though it must comply with the country’s existing tax regulations, including the 1% tax deducted at source (TDS) on crypto transactions and 30% capital gains tax on digital assets. India has increased scrutiny of foreign exchanges, recently targeting several platforms for non-compliance.

According to the press release, the exchange has stated that it will launch retail services later in 2025, with plans to introduce additional investment products in the future. However, regulatory uncertainty remains, as India has not yet established a comprehensive legal framework for cryptocurrencies, leaving room for potential policy changes.‍

India’s Expanding Blockchain Sector

India has emerged as a growing hub for blockchain and crypto-related development, with its share of global onchain developers rising from 3% in 2018 to 12% in 2023. The country has seen an increase in Web3 startups and blockchain projects despite strict regulatory measures.

While some officials have expressed concerns about digital assets enabling illicit financial activity, others have acknowledged India’s role in shaping global blockchain innovation. The government has taken a cautious approach, focusing on compliance and investor protection while exploring the potential for blockchain applications beyond cryptocurrencies.‍

Coinbase’s Engagement in India

As part of its broader international strategy, Coinbase has signaled its commitment to regulatory engagement. Recently, Paul Grewal, the exchange’s Chief Legal Officer, was appointed to the Board of the US-India Business Council (USIBC), an organization working to strengthen economic ties between the two countries.

Despite securing FIU registration, uncertainty persists for crypto businesses in India. Authorities have previously restricted banking access for crypto firms, and ongoing discussions about potential legislation for digital assets could introduce new regulatory hurdles.