Coinbase's "relentless" and "bold" communications strategy regarding India continues to surprise, according to multiple people in the crypto industry and government.
Coinbase (COIN) CEO Brian Armstrong has been outspoken compared to other industry leaders, taking to Twitter, for example, to question whether the Reserve Bank of India's (RBI) current "shadow ban" on crypto exchanges violated a landmark Supreme Court ruling. Armstrong later noted the RBI's "informal pressure" as the reason for Coinbase's withdrawal from India within days of launching trading.
"What Coinbase is doing is relentless and bold, one at a time, and to most it seems like a mistake, but it could be very bold," an industry source told CoinDesk.
The question of who is behind this communications strategy remains unanswered. Is Armstrong acting on his own? If not, who is advising him, whether within the company or from outside? Coinbase declined to respond to an inquiry from CoinDesk.
What Coinbase did
On April 7, 2022, Coinbase began operations in India, with executives touting how easy it would be to trade through the company's app, as payments would be processed through the Unified Payments Interface (UPI) widely used in India. Hours after the event, however, the body responsible for UPI (National Payments Corporation of India, under the auspices of the RBI) tweeted that it was "not aware of any crypto exchange using UPI."
Within three days, Coinbase ceased operations, and a few days later, some payment processors shut down local crypto exchanges.
"It was a sign that they don't know how to do business in India," said a longtime veteran of financial services in the country. Coinbase's communications strategy has "angered the authorities," according to industry observers and sources.
A CEO who simply speaks his mind?
Of course, Brian Armstrong's outspoken nature didn't start with India. Among other examples, he had plenty to say about crypto when it came to the Canadian trucker protests earlier this year, and there was a Coinbase company memo some time ago in which he suggested firing any employees whose values didn't align with his vision for the company.
"What Armstrong and Coinbase don't understand is that the Reserve Bank of India (RBI) is the almighty in the financial world and you can't just come and do whatever you want, no matter who you are, without facing backlash," said a person with close ties to the country's financial institutions.
As for the central bank itself, Governor Shaktikanta Das declined to address the issue directly, telling CNBC TV 18: "I don't want to comment on speculative observations made by individuals outside the bank."
However, the fact that Armstrong is an "outsider" in the Indian crypto space, and that his claims are backed up by news articles that have been labeled "speculative," may suggest that Das' comments represent a singular disregard for the Coinbase chief.
Why this matters
Coinbase's trading launch provided an opportunity for state institutions to crack down on cryptocurrencies, and they took advantage of it, according to several crypto industry players who preferred to remain anonymous.
At the moment, the industry is almost paralyzed in India, with low levels of trading, adoption and enthusiasm. Coinbase's go-it-alone strategy is at odds with the crypto industry's collective efforts to prioritize dialogue with the government over any move that could further anger those in power. "A crypto company that has its biggest interests outside India could take a position that disrupts the good work of several others in India," said one person from another exchange.