India’s government and the Reserve Bank of India (RBI) received several proposals urging them to reestablish Unified Payments Interface (UPI) access for crypto exchanges, amidst the country’s vague stance on crypto and Web3 technologies. While Indian authorities show support for blockchain-based innovations, their acceptance of cryptocurrency remains unclear. With significant tax burdens and unsubstantial payment options, the Indian crypto community continues to struggle.
Two proposals have already been submitted, with a third from the Bharat Web3 Association (BWA) on its way. BWA leads several Web3 companies in India and hopes to convince the government and RBI to reinstate UPI payments for crypto firms and exchanges. The move follows the National Payments Corporation of India’s (NPCI) decision to stop UPI access for exchanges after Coinbase India began accepting UPI and IMPS services for crypto trading in April 2022, seemingly catching the NPCI off-guard. Consequently, trading volumes on Indian crypto exchanges like WazirX and CoinDCX saw a sharp decline of over 70% last year.
Restoring UPI access for crypto trading may provide authorities and law enforcement agencies with an opportunity to monitor and track these transactions more effectively. According to one proposal by BlackDot, implementing anti-money laundering (AML) laws under India’s Prevention of Money Laundering Act would make compliant crypto exchanges eligible for UPI access.
Moreover, enabling UPI access for exchanges could act as a safeguard for Indian investors in the event of unforeseen circumstances. As India seeks to develop a global regulatory framework for the crypto world, it remains essential for the government to resolve the challenges plaguing this burgeoning industry.
In summary, India’s uncertain stance on cryptocurrency creates a challenging environment for both the crypto community and authorities alike. Proposals to restore UPI access for crypto firms and exchanges could improve transaction tracking abilities and protect investors. However, the government must find balance in addressing the struggles faced by the crypto industry while implementing regulatory measures that ensure security and compliance.
Source: Coingape
