IAMAI dissolves Blockchain and Crypto Assets Council (BACC) to focus on other emerging digital sectors, CBDC

The Internet and Mobile Association of India (IAMAI) has decided to shut down the Blockchain and Crypto Assets Council (BACC). In a statement, IAMAI said it is dissolving the Blockchain and Crypto Assets Council (BACC), which the association created and nurtured for four years. 

“The association 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],” the statement said. 

BACC members were informed about the decision at a meeting held in Mumbai today. IAMAI will continue to support activities of the BACC till the end of the month to ensure a smooth and proper transition of the sector as well as the closure of the ongoing projects.

In a joint statement, 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.”

IAMAI distancing itself from BACC could prove to be another blow to struggling crypto exchanges and companies in India, who have been battered by the market crash and the implementation of a harsh crypto tax regime.

Crypto experts say the nascent industry will lose a prominent policy advocacy arm with the dismantling of BACC by IAMAI.

“IAMAI’s BACC provided a platform for the crypto industry to voice opinions in a structured manner. Contrary to their global counterparts, Indian regulators have dismissed the potential of crypto in transforming payments, financial services and inclusion. Unfortunately, BACC is being shut down. The industry will lose a prominent policy advocacy arm in the form of BACC,” Sharat Chandra, VP, Research and Strategy at blockchain-based identity management platform EarthID, told FE Online.

BACC represented the crypto ecosystem in India. It has been working with policymakers, regulators and industry. Members of the council include leading crypto players in India like WazirX, CoinDCX, CoinSwitch Kuber, ZebPay, BitBNS, Chingari, Vauld, and Mudrex etc.

Reports said that IAMAI was having disagreements with the crypto companies. There was also pressure in view of RBI making its anti-crypto stance clear. 

“Since its formation, BACC has been proactively paving the way for bitcoin and cryptocurrency adoption alongside its member crypto exchanges, while focusing minimally on other stakeholders, aspects, and demands of the blockchain sector. The recent market meltdown, the shifting regulatory environment, and additional clarity from the RBI and the Finance Ministry may have prompted IAMAI to retrospect and re-evaluate its position and make a decision in the interest of the greater good,” said Gaurav Mehta, founder of crypto tax platform Catax. 

Regulatory uncertainty over crypto has not ended. While the Government is still working on crypto rules, tax rules announced in Budget 2022 have severely affected the trading volumes of exchanges. 

As per the crypto tax rules, a flat 30% tax applies on income from crypto transfers while 1% TDS is also required to be levied during crypto transactions. 

BACC has created a self-regulation code of conduct for the industry in consultation with key stakeholders in the business. This code of conduct was adopted by all member crypto exchanges.