An Indian crypto exchange and a policy firm have independently made appeals to the government, urging the restoration of access to the national Unified Payments Interface (UPI) for crypto firms following its apparent suspension in 2022.
While the proposals were not coordinated, they mark a significant initiative by India’s crypto stakeholders to advocate for policy amendments governing the growing industry, which has faced setbacks, including taxes and a crypto winter.
The alleged seamless trading process
According to sources familiar with the matter, the Indian government and central bank have been presented with proposals to reinstate access to the Unified Payments Interface (UPI) for the crypto industry. The UPI is a widely used real-time payment system in the country.
India’s stance on the cryptocurrency industry has been marked by ambiguity and challenges.
After imposing a substantial 30% tax on digital assets, the government further exacerbated the situation for crypto enthusiasts. The National Payments Corporation of India (NPCI) indirectly suspended the usage of the UPI, creating obstacles for the crypto community.
However, India also took a significant step in November 2022 with the establishment of the Bharat Web3 Association (BWA), a dedicated advocacy committee entrusted with the oversight of this burgeoning sector.
In a move that highlights the BWA’s approach, the committee has recently put forward two proposals to the government, seeking favorable policies and regulations for the industry.
There are also expectations that a third proposal will be unveiled in the coming weeks, demonstrating the ongoing efforts of the BWA to shape the future of cryptocurrency in India.
Where the UPI was lost
The disruption in the payment rail system arose following the introduction of Coinbase’s operations in India on April 7, 2022.
During the launch, Coinbase executives emphasized the seamless trading experience on their app, with payment processing facilitated through the UPI.
However, shortly after the event, the NPCI, which oversees UPI, took to Twitter to clarify that they had no knowledge of any crypto exchange utilizing UPI.
The NPCI operates under the purview of the Reserve Bank of India (RBI), the country’s central bank.
The decision regarding the restoration of UPI access to crypto exchanges in India remains uncertain, but if the authorities choose to do so, it could have significant implications for the industry as a whole.