The consulting company Black Dot and an unnamed cryptocurrency exchange turned to the Central Bank of India with a request to restore access for crypto companies to the Union Payments Interface (UPI) national payment system.

Last year, Indian cryptocurrency trading platforms CoinSwitch Kuber and WazirX were forced to stop accepting deposits via UPI due to regulatory uncertainty regarding such payments. The American marketplace Coinbase also had to suspend services to Indian users.

Due to the loss of access to UPI services, Black Dot has proposed to the Reserve Bank of India (RBI) to change the regulatory policy of the cryptocurrency industry, which already has to overcome many obstacles, including increasing taxes on crypto assets. The Black Dot team argues that seamless access for crypto exchanges to UPI will provide a higher level of transparency, as it will be easier for regulators to track suspicious transactions.

Representatives of Black Dot mention the report, which indicates that after the shutdown of exchanges access to UPI, more than 80% of transactions were carried out on a peer-to-peer basis. In addition, arbitrarily denying a certain class of investors access to selected instruments through the UPI while another group of investors has such access (for example, participation in an IPO) violates provisions of equality before the law.

An anonymous crypto exchange announced that it had filed a request with the National Payments Corporation of India (NPCI), a special division of the RBI under the country’s Ministry of Finance. A new cryptocurrency industry advocacy group, the Bharat Web3 Association (BWA), is working on a similar request to remove restrictions on the use of UPI. In the coming weeks, the request will go to the Indian government for consideration.

At the beginning of the year, Indian Finance Minister Nirmala Sitharaman said that the government would keep the current rules for the cryptocurrency industry going into 2023.