UPI Restoration Proposals for Crypto Exchanges Sent to Indian Authorities
According to many reliable sources, the Indian government and Central Bank, i.e., the Reserve Bank of India (RBI), have been requested to reverse the decision of UPI suspension for crypto payments. The proposal asks the authorities to authorize crypto traders to use the Unified Payment Interface (UPI) to make real-time payments.
Two proposals in the same context have already been made to the authorities. The third one will emerge in the upcoming weeks through a newly developed India’s crypto policy advocacy group, named Bharat Web3 Association (BWA).
Crypto Industry and Their Challenges
The crypto market has encountered severe challenges in the past period. The ambiguous approach of the Indian government toward cryptocurrencies has made it challenging for them to proliferate.
In the past year, the Indian government imposed a 30% tax on profits from digital assets, marring crypto investors’ enthusiasm. Crypto winter and shadow ban also affected the market adversely. The cherry on the cake was the indirect cancellation of UPI services by the National Payments Corporation of India (NPCI).
India’s crypto stakeholders have been seeking steps toward changing crypto policies significantly in their favor. That is why the restoration proposals hold immense significance for the crypto community.
The Scenario of Indian Crypto Exchanges Losing UPI Access
When Coinbase launched in India on April 7, 2022, its executives exclaimed about the seamlessness UPI payment processing will offer when the investors trade on their platform. To this, the NPCI (governing authority of UPI in India, backed by RBI) reverted after hours, clarifying that they had no awareness about crypto exchanges through UPI.
Since then, two proposals have been made to the authorities, one by an unknown crypto exchange requesting to uplift the restrictions on using the UPI services. The second proposal came from the public policy advisory firm, made in portions over a few weeks of India adding crypto to anti-money laundering rules.
UPI And Its Popularity in India
When Covid hit India, digitization came forward, and payments through the UPI medium became prominent. The 2022-2023 year saw a starking 83 billion transactions processed through UPI, according to NPCI data. The rising figures only indicate the growing adoption of UPI in India’s payment ecosystem.
Indian Authorities Stance on UPI Restoration
It’s not clear whether Indian authorities will allow crypto exchanges through UPI. However, if they authorize it, crypto trading will become quicker, streamlined, and credible for retailers and investors, as majority of the Indians use UPI to transact on a daily basis.
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