Crypto Lobby Group in India Abruptly Shut Down, Member Confirms

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Altcoins
Crypto Lobby Group in India Abruptly Shut Down, Member Confirms

The Blockchain and Crypto Assets Council (BACC), India’s crypto industry lobby group, has suddenly announced that it’s ceasing its operations after five years.

Crypto Growth Advocacy in India

According to Sathvik Vishwanath, the CEO and co-founder of Indian crypto exchange Unocoin, the BACC’s parent organization, the Internet & Mobile Association of India(IAMAI), is planning on focusing on non-crypto sectors.

The decision to suspend trading in cryptocurrencies was taken due to the significant decline in the global market. Bitcoin’s price has dropped below $20,000, from over $60,000 in November. In addition, various factors such as new taxes and the crashing trading volumes have affected the Indian crypto industry.

Due to the lack of a robust regulatory framework, cryptocurrency is not considered a legal tender in India. This makes it very difficult for service providers to operate in the country. There is still a lot of confusion regarding the tax status of cryptocurrencies. According to the chairman of the Central Board Of Direct Tax, anyone who makes money from Bitcoin will have to pay tax on it. Other officials of the Income Tax Department have also suggested that the profits from cryptocurrency should be taxed as capital gains instead of dividends.

According to Vishwanath,  IAMAI only conducted the meeting to inform the members of the BACC about the organization’s decision. He said the members had already made up their minds about the issue.

The BACC was established to advocate for the Indian crypto industry and to provide a self-regulatory framework. Several prominent exchanges in the country are members of the organization.

Some of the international companies that have been involved in the BACC include Binance and Chainalysis. In October, the organization appointed Ashish Singhal and Sumit Gupta as its co-chairs. Singhal is the founder and CEO of coinSwitch, while Gupta is the co-founder and CEO of coinDCX.

India’s Stance on Crypto Exchanges

Due to the growing number of regulations related to cryptocurrencies in India, the country’s central bank banned financial institutions and banks from dealing with them in 2018. It resulted in the closure of several domestic exchanges and the ban on the trade of cryptocurrencies. In 2020, a Supreme Court decision overturned the ban and allowed exchanges to reopen.

In November 2021, the Indian government clarified that it was against private cryptocurrencies. However, a parliamentary committee discussed the issue in the next few months and suggested that the country should regulate them instead. The bill for regulating cryptocurrencies has not yet been approved by parliament.

Despite the slow progress of India’s cryptocurrency bill, the country’s finance minister has proposed the introduction of CBDCs in the country’s annual budget. The Reserve Bank of India (RBI) will be responsible for issuing the CBDC, which will be legal tender in digital form.

‘A Good Thing’

Although the dissolution of BACC doesn’t seem to impact the Indian crypto industry significantly, one executive noted that it’s a good thing for the industry as it allows operators to continue raising funds and reaching out to policymakers.

According to a source, various exchanges can now come together and form an association. There is also a plan to create a body representing the industry.

In 2018, the IAMAI fought against the Reserve Bank of India for restricting the operations of financial institutions that deal in cryptocurrencies. In 2020, the Supreme Court of India ruled that the central bank’s ban on the operations of cryptocurrencies was unconstitutional.

According to a source, who is knowledgeable about the industry, major crypto exchanges in India have now hired policy and compliance chiefs to address the issues related to their operations. These individuals are currently working on increasing the efficiency of the exchange.