A request by an Indian cryptocurrency exchange and a policy firm urges the government to allow crypto companies the access to the national UPI Interface which was suspended in 2022
Image: Shutterstock
The Indian government and the RBI have received two proposals for restoring the crypto industry’s access to the Unified Payments Interface (UPI) which is a widely used real-time payment system in the country. "In the coming few weeks", a third proposal will also be made by the Bharat Web3 Association (BWA), which is a newly formed crypto policy advocacy group in India.
The adoption of UPI in India has increased rapidly since the pandemic. In 2022 alone approximately 74 billion UPI transactions worth around $1.5 trillion were conducted. The UPI system, which is used nationwide, allows the citizens to pay for goods and services using a QR code linked to their bank accounts.
The first proposal for restoring UPI access was made by an Indian crypto exchange which requested anonymity. "We have submitted a representation with the NPCI, seeking the removal of restrictions on use of UPI services," said the team behind the crypto exchange.
The proposal was made soon after India included crypto to anti-money laundering rules (PMLA or Prevention of Money Laundering Act), which made crypto exchanges, non-fungible token (NFT) marketplaces and custody service wallet providers legally responsible for monitoring suspicious financial activities in March 2023.
Crypto industry advocates were of the view that this gave "more legitimacy" to the sector because "adding crypto to anti-money laundering rules is some semblance of regulation," a senior industry participant said on Monday.