The Indian cryptocurrency industry is going through a tumultuous time. Since the cut off of access to the Unified Payment Interface (UPI) for cryptocurrency exchange platforms, the situation has become more complicated for them and their users. UPI is a very popular real-time payment platform in India, heavily used by the country’s tech-savvy population for day-to-day transactions. In 2022, UPI processed 74 billion transactions, with a total value of over $1.5 trillion, attesting to its massive adoption.
The crisis emerged with the arrival of Coinbase in India on April 7, 2022. Following Coinbase’s promotion of the use of UPI for all payments on its platform, the National Payments Corporation of India (NPCI) , the governing body of UPI, said via Twitter that it had not been made aware of the use of UPI by cryptocurrency exchanges. The NPCI operates under the authority of the Reserve Bank of India (RBI).
This uncertain climate quickly turned into a real storm for the cryptocurrency industry in India, accentuated by significant taxes and a silent ban.
According to cryptocurrency news, the latter led to a cut of banking services to cryptocurrency exchange platforms by Indian banks and payment processors, thus depriving them of access to UPI services.
Today, efforts are being made to restore access to UPI. Two proposals have been made to this effect with the Indian government and the RBI. The first comes from an Indian crypto-currency exchange platform and the second from the advisory firm Black Dot.
Separately, Bharat Web3 Association (BWA), a cryptocurrency policy advocacy group, plans to submit a third proposal in the coming weeks.
Although these proposals are uncoordinated, they represent a major initiative by players in the crypto space in India to influence policy governing this uncertain industry.
These moves illustrate the desire of the cryptocurrency industry in India to restore the status quo and ensure access to UPI, an essential tool for the development and growth of this industry in the country.
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