Coinbase meets Karnataka officials in crypto regulatory diplomacy push

Coinbase, the U.S.-based cryptocurrency exchange, is intensifying its crypto regulatory diplomacy with India, as Chief Legal Officer Paul Grewal met with Karnataka’s Minister for IT and Digital Economy, Priyank Kharge, to explore new collaborations in blockchain infrastructure and policy engagement.

The high-level meeting took place this week in Bengaluru, the capital of Karnataka and widely recognized as India’s tech epicenter. Grewal and Kharge discussed a range of potential partnerships, including developer tooling, cybersecurity, capacity building, and blockchain integration into public governance systems.

“The future is onchain — and it’s being built here,” — Paul Grewal, Chief Legal Officer, Coinbase, said in an X post following the meeting, highlighting India’s strategic relevance in Coinbase’s global blockchain expansion plans.

Kharge, in a separate post, described the exchange’s developer platform as one that “is helping simplify blockchain development and enabling developers to build onchain applications with ease,” confirming the state’s intent to tap into this emerging digital infrastructure.

Karnataka eyes blockchain for governance reform

The discussions signal a renewed government interest in blockchain adoption for public services. Kharge confirmed that the Karnataka government is “keen on exploring” blockchain technology as part of its broader digital governance strategy, especially in building resilient digital public infrastructure.

This push aligns with earlier state-level interest: as far back as 2017, Karnataka hosted seminars on Bitcoin and blockchain to enhance public sector awareness. The state’s readiness to re-engage at a deeper technical and regulatory level now points to a new chapter in India’s decentralized technology adoption story—one that hinges on crypto regulatory diplomacy.

“Partnerships like these are essential if India is to leverage blockchain at scale for governance,” — Anjali Shah, Research Director, Indian Council for Digital Policy, told Cointelegraph. “It’s a two-way street: global platforms need clarity, and governments need the tech ecosystem’s capacity.”

Kharge further noted interest in joint hackathons, developer incubation, and training programs to bridge knowledge gaps, especially in cybersecurity—another avenue where Coinbase has offered support.

Coinbase’s cautious India re-entry strategy

Coinbase’s engagement with Karnataka also marks a strategic attempt to rebuild bridges with Indian regulators following years of friction. In late 2023, Coinbase halted its retail services in India and advised users to withdraw funds, citing unresolved compliance issues. The earlier suspension of its Unified Payments Interface (UPI) access just days after launch in April 2022 served as a stark reminder of India’s regulatory ambiguity.

However, the tide may be turning. In February 2025, reports emerged that Coinbase had re-opened talks with Indian authorities. Around the same time, Grewal was appointed to the U.S.-India Business Council (USIBC) Global Council, signaling a broader intention to engage diplomatically through industry platforms—a core strategy in Coinbase’s crypto regulatory diplomacy.

“Paul’s involvement in the USIBC and his visit to Karnataka reflect a mature shift from confrontation to consultation,” — Rahul Singh, Crypto Policy Analyst, Blockchain India Foundation, told Cointelegraph. “This is what constructive crypto regulatory diplomacy looks like in practice.”

India’s broader crypto policy still evolving

Despite state-level enthusiasm, national crypto regulation in India remains a complex and evolving domain. In early 2025, the Crypto-systems Oversight, Innovation, and Strategy (COINS) Act was unveiled as a non-binding policy framework to guide future legislation. While it has not been formally introduced in Parliament, its publication shows a growing appetite among Indian policymakers to bring structure to digital asset oversight.

The Coinbase-Karnataka meeting may be seen as a localized manifestation of this broader policy thaw. Still, challenges remain: regulatory uncertainty, tax complexity, and inconsistent enforcement continue to deter many global crypto firms.

Nevertheless, Coinbase appears committed to rebuilding trust and positioning itself as a long-term partner in India’s digital future. With crypto regulatory diplomacy now a centerpiece of its India strategy, the company is betting on dialogue over disruption.

Conclusion

Coinbase’s outreach to Karnataka marks a new phase in crypto regulatory diplomacy, combining technical support with strategic engagement. As the state accelerates its blockchain governance ambitions, Coinbase’s willingness to re-engage through official channels may serve as a model for other crypto firms navigating complex policy landscapes. Whether this leads to a full-fledged return to the Indian market will depend largely on the national regulatory climate—but for now, the diplomatic groundwork is being laid.