- Proposals urge the Indian government and central bank to restore the crypto industry’s access to UPI.
- Bharat Web3 Association plans a third proposal after earlier submissions.
- Efforts to regulate crypto industry follow challenges including taxes, shadow ban, and crypto winter.
According to anonymous sources, there have been proposals urging the Indian government and central bank to allow the crypto industry to regain access to the widely popular real-time payment system known as the Unified Payments Interface (UPI).
India’s newly formed crypto policy advocacy group, the Bharat Web3 Association (BWA), is set to make a third proposal in the near future, within the coming few weeks. This follows two earlier proposals that have already been submitted.
These proposals mark the significant initial effort by India’s crypto stakeholders to advocate for policy modifications that regulate the growing industry. This comes after a challenging period for the industry, including severe taxes, a crypto winter, and a “shadow ban.” The shadow ban involved Indian payment processors discontinuing banking services for crypto exchanges, while UPI services were seemingly suspended around the same period last year.
The proposals represent the first major attempt by India’s crypto stakeholders to push for policy changes to govern the expanding industry. This follows a difficult period for the sector, characterized by high taxes, a downturn in crypto markets, and a “shadow ban.” The shadow ban entailed Indian payment processors terminating banking services for crypto exchanges, and it coincided with the apparent suspension of UPI services around the same time last year.
Following the pandemic, the adoption of UPI in India has experienced a remarkable surge. In 2022 alone, there were around 74 billion UPI transactions, amounting to a value of $1.5 trillion. UPI enables individuals to conveniently make payments for various goods, including groceries, by scanning a QR code linked to their bank account. Its nationwide usage is attributed to merchants not being charged any fees for accepting UPI payments.
The payment rail crisis was seemingly triggered by the entry of Coinbase into the Indian market. On April 7, 2022, Coinbase launched its operations in India, with company executives highlighting the simplicity of trading on their app and the use of UPI for payment processing. Shortly after the launch, the National Payments Corporation of India (NPCI), which oversees UPI, took to Twitter to clarify that they were unaware of any crypto exchange utilizing UPI. The NPCI operates under the supervision of the Reserve Bank of India (RBI), the nation’s central bank.
