Indian Government Receives Calls To Restore UPI Use For Crypto Exchanges: Report

A new proposal is set to be submitted to the Indian state government on top of two previous proposals to restore the use of the country’s Unified Payments Interface (UPI) for crypto exchanges operating in India.

The latest development comes in 2022 after the supervisory body of the Real-Time Interbank Payments Network claimed that it was not aware that crypto exchanges were using the UPI service.

a third offer on the way

India’s Bharat Web3 Association (BWA), a cryptocurrency advocacy group, could be the latest body to be formed in November 2022. submit A proposal to the Government of India and the Reserve Bank of India (RBI) regarding access to the country’s UPI for crypto exchanges. Two bodies have already made similar proposals, with the BWA expected to come in a few weeks.

The BWA was formed after the dissolution of the Blockchain and Crypto Assets Council (BACC), an organization under the Internet and Mobile Association of India (IAMAI), which had also called for the restoration of UPI for crypto firms in the country. . According to IAMAI at the time, the advocacy group’s disbandment resulted from India’s uncertain regulatory environment.

In April 2022, the National Payments Corporation of India (NPCI), a division of the RBI, said it was not aware that crypto exchanges were using the UPI facility. The statement came hours after cryptocurrency exchange giant Coinbase announced support for UPI for cryptocurrency purchases. The NPCI statement prompted CoinSwitch Kuber and WazirX to disable deposits in Indian Rupees.

UPI, widely used in India, is a real-time interbank payment system that facilitates peer-to-peer (P2P) and peer-to-merchant (P2M) transactions. It was developed by NCPI in 2016.

With two proposals on the ground and a third on the way, it remains to be seen whether the government will change its stance or maintain restrictions.

Crypto Adoption Continues in India

Meanwhile, cryptocurrency exchanges are still grappling with the country’s regulatory policies unfavorable to the industry. After the introduction of 30% tax on digital asset transfer and 1% transaction tax deducted at source (TDS), exchanges have lamented how the high taxes have affected their growth.

In December 2022, the BWA submitted recommendations to India’s Ministry of Finance, a portion of which sought relief from unfriendly crypto taxation. However, the position remains unchanged.

Despite the government’s stance towards crypto, adoption in India continues to grow, with a recent report estimating that the country could have over 156 million cryptocurrency users by the end of 2023.