Blockchain and Crypto Assets Council (BACC), has requested the National Payments Corporation of India to restore UPI service to Indian cryptocurrency exchanges.
According to media reports, the letter requested that the Inter-Bank Retail Payments and Settlements Body meet with it to discuss and clarify its concerns about the crypto trade.
A source at BACC said that they had requested time with the NPCI in order to understand their reservations. They also wanted to present our point of view to clarify any misunderstandings.
According to BACC, the letter stated that many crypto exchanges follow strict user KYC protocols. It asked NPCI to restore UPI services to these businesses.
BACC is an advocacy group that works under the Internet and Mobile Association of India. It is made up of all the major crypto exchanges in India, such as CoinSwitch Kuber and CoinDCX. BACC was co-chaired by Ashish Singhal, CoinSwitch founder, and Sumit Gupta, CoinDCX cofounder.
What is UPI?
UPI stands to Unified Payments Interface and is a real-time interbank P2P/P2M payment system that was developed by NPCI. UPI was launched in 2016 and had 150 million users until May 2021. It processed 68 Billion transactions, worth $460 Billion, till November 2021. This made it a mobile-based instant payment system.
The UPI service was denied to Indian investors until a bill on cryptocurrency regulation is passed by parliament. NPCI is a wing of India’s central bank, the Reserve Bank of India.
India has one of the most difficult tax environments for crypto-related businesses. Crypto transactions gain are subject to 30% tax, but there is no provision for losses. Tax authorities plan to increase GST from 18% to 28%.
Crypto Exchanges Denied UPI
April saw the NPCI issue a statement stating that it is not aware of any crypto exchanges using the UPI service. All major crypto exchanges were forced to remove the “deposit” option in Indian rupees by this clarification.
This also meant that UPI-enabled payments companies like MobiKwik, which process payments using UPI, stopped offering services to crypto businesses. These developments led to a sharp drop in trading volume.
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