Blockchain and Crypto Assets Council (BACC)

In News

• Recently, 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.

About BACC

• BACC acted as an umbrella entity for over a dozen crypto and blockchain companies to liaise with the government.
• Aim: It represents Indian crypto industry players such as CoinSwitch Kuber, WazirX, CoinDCX, Zebpay, BitBNS, Vauld, Chingari, Mudrex, etc, to advocate the crypto industry’s arguments to regulatory bodies such as the Reserve Bank of India (RBI).
• Code of conduct: it introduced a code of conduct for all crypto platforms to follow which was likely to be updated to avoid run-ins with regulators.

Issues

• The move is another blow to India’s crypto industry: which has been hit by stiff taxes, payment processors cutting off exchanges, trading volumes crashing and a global bear market.
• Uncertainty: 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).
• Monetary stability: The RBI has taken a view that private cryptocurrencies threaten the monetary stability of the country.
• Tightening of norms: 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.
• Celsius Network: US crypto lender Celsius Network which froze withdrawals last month has filed for bankruptcy in New York, becoming the latest victim of the crypto winter.

RBI and Digital Currency

• RBI exploring DLT (Distributed Ledger Technology) based Central Bank Digital Currency. 
  • Under DLT, details are recorded in multiple places at the same time.
  • For ex: Blockchain is just one type of distributed ledger.
• Central Bank Digital Currency (CBDC): It will be a legal tender.
  • Can be converted/exchanged at par with similarly denominated cash.

Way forward

• Digital currency: RBI has been working towards launching its own digital currency.
• Crypto-friendly destinations such as the UAE: 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.  

Source: IE