India expands national payment network to Singapore: What’s in it for crypto?

National Payments Network of India, Unified Payments Interface (UPI), extension its services outside of India by integrating with Singapore’s PayNow fast payment system. Shaktikanta Das, Governor of the Reserve Bank of India, and Ravi Menon, Managing Director of the Monetary Authority of Singapore launched the facility through token transactions using the UPI-PayNow link.

The UPI-PayNow integration will allow users of the two countries to quickly send money across borders. It is possible to send or receive money from India using only UPI-id, mobile phone number or virtual billing address for money held in bank accounts or e-wallets. The UPI real-time instant payment system helps you instantly transfer cash through a mobile interface between two bank accounts.

Initially, State Bank of India, Indian Overseas Bank, Indian Bank and ICICI Bank will facilitate outgoing remittances. Axis Bank and DBS Bank India will facilitate incoming remittances. DBS Bank and Liquid Group will provide the service to users in Singapore.

Regulatory Implications of Tax on Cryptocurrency Transactions in India

ICICI Bank is also part of India’s Central Bank Digital Currency (CBDC) program. India has launched a CBDC pilot project in two phases, in November 2022 for the wholesale market and in December for retail users. Since the launch of the pilot project, the digital rupee has registered 770,000 transactions involving eight banks. Five cities are already participating in the experiment, and perhaps nine more cities will join the trials in the near future.

Satvik Vishwanath, CEO of Indian cryptocurrency exchange Unocoin, told Cryptooshala:

“This is a big advantage for India’s payment systems considering that almost 30% of Singapore’s population is expats and they send money to India once a month or quarter. This integration eliminates friction, reducing processing time and costs.”

The digital payment infrastructure in India has expanded dramatically over the past few years with the advent of COVID-19. However, the government is skeptical about cryptocurrencies, imposing a 30% tax on profits from cryptocurrencies, which forced the big players to leave the country. However, the government is interested in using blockchain technology for its CBDC program and the existing infrastructure is helping to scale its CBDC program.

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