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Explained: Why has India’s Internet companies’ body dissolved the BACC, its flagship crypto advocacy platform?

Amid powerful opposition by the RBI and a clampdown by the government, the Internet and Mobile Association of India has complained of the 'very uncertain' regulatory environment in the country, and announced it would focus on other areas instead

A representation of cryptocurrency is seen in front of Binance logo in this illustration taken, March 4, 2022. (Reuters Photo/File)

The Internet and Mobile Association of India (IAMAI), the industry body representing top Internet companies and tech platforms, has dissolved a key unit set up four years ago to do public advocacy for the cryptocurrency and blockchain sector, citing regulatory uncertainty.

What is this unit?

The Blockchain and Crypto Assets Council (BACC), which represents Indian crypto industry players such as CoinSwitch Kuber, WazirX, CoinDCX, Zebpay, BitBNS, Vauld, Chingari, Mudrex, etc, was formed to advocate the crypto industry’s arguments to regulatory bodies such as the Reserve Bank of India (RBI). The central bank has been deeply sceptical of private cryptocurrencies.

And why has it been dissolved?

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In a statement issued on Thursday, IAMAI said it was “forced to take the decision in light of the fact that a resolution of the regulatory environment for the industry is still very uncertain, and that the association would like to utilise its limited resources for other emerging digital sectors, which make a more immediate and direct contribution to digital India, notably, deepening financial inclusion and promoting Central Bank issued Digital Currency (CBDC)”.

So what are the problems the crypto sector has been facing?

The RBI has taken a view that private cryptocurrencies threaten the monetary stability of the country. Late last month, RBI Governor Shaktikanta Das noted that cryptocurrencies “are a clear danger”, and that the country must be “mindful of the emerging risks on the horizon”. Meanwhile, the RBI has been working towards launching its own digital currency.

The proposal to dismantle the BACC had been under consideration at the IAMAI for some time given the increasing tightening of norms for crypto players by the government and the stance taken by the RBI, sources said.

And in what ways has the industry responded to these headwinds?

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Over the past few years, as a clampdown on cryptocurrencies has progressed, including action by law enforcement agencies against some platforms, the frequent issuing of new rules and regulatory tweaks even as there is a lack of clarity on policy in the longer run, multiple Indian entrepreneurs and developers in the Web 3.0 space have moved out to more crypto-friendly destinations such as the UAE.

In a joint statement, the Chair and Co-chair of the BACC, Ashish Singhal and Sumit Gupta, said: “Our stated belief as industry has always been to have sustainable dialogue with regulators and stakeholders and address concerns for progressive regulations. As an industry we will continue to positively engage with all stakeholders and continue to build emerging tech including Web 3.0”.

First published on: 15-07-2022 at 03:19:01 pm
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