BACC dissolution exposes chinks in India’s crypto armour

CHENNAI: In a surprise move, The Internet and Mobile Association of India (IAMAI) decided to shut down the Blockchain and Crypto Assets Council (BACC). What this essentially means is IAMAI will cease to represent crypto-exchanges operating in India. This comes after IAMAI had created and nurtured BACC for four years. The official version said it was forced to do this in the light of the fact that the regulatory environment for the industry is still uncertain and it remains unclear as to when regulatory guidelines would be put in place. This brings to an end an affiliation in which both sides were increasingly taking divergent stances on key issues.

The differences between the two camps (IAMAI and BACC) had been simmering for months, with crypto players feeling IAMAI wasn’t doing enough to push their cause, while the industry body felt that crypto players needed to do more in terms of compliance with government regulations. It is believed that disagreements between the association and crypto founders with IAMAI was the major reason that catalysed this decision. IAMAI’s recommendations not being adhered to internally was another pain point. The BACC group had been highly indisciplined in terms of following through the demands and requirements of the government as decided during the meetings with government bodies. This precipitated a series of discussions with no consensus resulting in the decision. The regulatory environment for the industry remained opaque, which merited a better allocation of its resources for other emerging digital sectors, which makes a more immediate and direct contribution to the social and economic mandate of digital India like financial inclusion and Central Bank issued Digital Currency (CBDC).

So, what is the way ahead? Will it weaken the demands of the crypto industry from the government as exchanges were among the biggest stakeholders? Without a structured representative body, this move will not augur well for the crypto industry as the interface now becomes toothless to say the least. This would also result in a dealignment between the Government and the crypto industry, and could have the industry moving in different directions, as the thread that bound it to an extent has just come undone. Without a structured approach a new Pandora’s Box will open without a veritable consensus. More arbitrary decisions would get plugged in and what once was a fair voice of sanity in for the volatile asset class, now would become muted.

In the aftermath of the dissolution, cryptocurrency exchanges and blockchain companies are trying to stitch together their own independent association. Preliminary talks are now on between key stakeholders, but a new association will take time to form as key stakeholders are still to find a common ground. There is a need for existing bodies and associations to pick up the baton and step up efforts to bring a sense of cohesion in the rapidly growing but uncertain terrain that needs to be traversed. Stronger — yes, but how, that question remains as IAMAI was doing a good job in the space and the new associations would have large boots to fill.