Coinbase's "unrelenting" and "audacious" communications strategy regarding India continues to surprise, according to multiple people across the crypto industry and inside the government.
Coinbase (COIN) CEO Brian Armstrong has been outspoken compared with other industry leaders, for instance taking to Twitter to ask if the Reserve Bank of India (RBI) has violated a landmark Supreme Court order with the currently in-place "shadow ban" on crypto exchanges. Armstrong later took note of "informal pressure" from the RBI as the reason for Coinbase’s trading pause in India within days of its trading launch.
"What Coinbase is doing is unrelenting and audacious, one after the other, and to most it appears to be a mistake but it could be very bold," an industry source told CoinDesk.
As for who is behind this communications strategy, questions remain. Is Armstrong acting on his own? If not, who is advising him, whether from inside the company or externally? Coinbase declined to comment on an inquiry from CoinDesk.
What Coinbase did
On April 7, 2022, Coinbase launched operations in India, with executives touting how easy it would be to trade on the company app with payments being processed by Unified Payments Interface, or UPI, a widely used payments system in India. Hours after the event, though, the entity that governs UPI, (National Payments Corporation of India, under the aegis of the RBI) tweeted to clarify that it was “not aware of any crypto exchange using UPI.”
Within three days, Coinbase suspended operations, and several days later some payment processors cut off local crypto exchanges.
"It was a reflection of how they don't know how to do business in India," said a longtime veteran of financial services in that country. The Coinbase communications strategy, or thereof, "antagonized authorities," according to industry observers and sources.
A CEO who simply speaks his mind?
To be sure, Brian Armstrong's outspoken nature didn't start with India. Among other examples, he had plenty to say regarding crypto as it related to the Canadian trucker protests earlier this year, and there was a Coinbase company memo some time ago in which he suggested the exit of any employee whose values didn't align with his vision for the company.
"What Armstrong and Coinbase don't get is that in India, [the] RBI is the all-mighty in the financial world and you can't just come in and do whatever the hell you want whoever you may be and not expect backlash," said a person with close ties to the country's financial institutions.
As for the RBI itself, Governor Shaktikanta Das declined to directly address the issue, telling CNBC TV 18, "I would not like to comment on speculative observations made by individuals outside."
However, the fact that Armstrong is an "outsider" in India's crypto space and his claims supported by news articles stated to be "speculative," the comments by Das could be thought to indicate a unique disregard for the Coinbase chief.
Why it matters
Coinbase's trading launch provided an opportunity for governmental institutions to clamp down on crypto, and they took it, according to several crypto industry stakeholders who preferred to remain anonymous.
For the moment, the industry in India is nearly paralyzed, with trading, adoption and enthusiasm all running low. Coinbase's go-it-alone strategy flies in the face of what had previously been a collective effort by the crypto industry to choose dialogue with the government over any move that could further antagonize the powers that be. "One crypto company which has its biggest interests outside India could be taking a position that disrupts the good work of several others in India," said a person from another exchange.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.