The Bharat Web3 Association (BWA), an influential cryptocurrency advocacy group in India, is set to submit a proposal to the Indian government and the Reserve Bank of India (RBI) urging the restoration of access to the country’s Unified Payments Interface (UPI) for crypto exchanges. This will mark the third attempt to address the issue, following two previous proposals from different entities. The move comes after the National Payments Corporation of India (NPCI), the governing body for the UPI, expressed unawareness of crypto exchanges utilizing the UPI service in 2022.
The formation of the Bharat Web3 Association (BWA) came after the dissolution of the Blockchain and Crypto Assets Council (BACC), an organization under the Internet and Mobile Association of India (IAMAI). BWA, comprising prominent figures in the Indian crypto community, aims to navigate the uncertain regulatory landscape and advocate for favorable conditions for crypto firms. Their proposal, expected to be submitted in the coming weeks, will echo the previous calls for UPI access restoration.
In April 2022, the National Payments Corporation of India (NPCI), a division of the RBI, acknowledged the need for awareness regarding crypto exchanges utilizing the UPI feature. This statement came shortly after Coinbase, a leading global crypto exchange, announced support for UPI transactions. As a result, CoinSwitch Kuber and WazirX disabled deposits in Indian rupees. The NPCI’s concerns prompted the need for proposals addressing the issue and seeking regulatory clarity.
Unified Payments Interface (UPI) is a widely used real-time interbank payment system in India. It enables seamless peer-to-peer (P2P) and peer-to-merchant (P2M) transactions. Developed by the National Payments Corporation of India (NPCI) in 2016, UPI has become an integral part of the Indian digital payment ecosystem. However, the restrictions placed on crypto exchanges’ access to UPI have hindered the industry’s growth potential and limited user convenience.
While the Indian government’s stance on cryptocurrencies remains uncertain, crypto adoption in the country continues to rise. However, cryptocurrency exchanges face challenges due to unfavorable regulatory policies, including high taxes on digital asset transfers and transaction tax deductions. In December 2022, BWA submitted recommendations to India’s Finance Ministry seeking relief from crypto taxation burdens. Unfortunately, the situation has yet to see any significant changes.
Despite regulatory hurdles, recent reports indicate that cryptocurrency adoption in India is on the rise. Projections suggest that the country could have over 156 million cryptocurrency users by the end of 2023, highlighting the growing interest and potential of the industry. As the market evolves, the government’s response to proposals like BWA’s will play a crucial role in shaping the future of crypto regulations and fostering a more conducive environment for crypto exchanges and users alike.
In conclusion, the Bharat Web3 Association’s forthcoming proposal to restore UPI access for crypto exchanges represents a renewed effort to address the regulatory challenges faced by the industry in India. With previous proposals ignored, the crypto community eagerly awaits the government’s response, hoping for more favorable conditions that will support the growth of the crypto ecosystem while ensuring necessary regulatory safeguards are in place.
Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments. This is a news article only.
