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India’s Central Bank Quietly Forms New Cryptocurrency, Blockchain Research Unit.
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Reserve Bank of India (RBI) has reportedly established a new internal unit dedicated to researching and regulating new emerging technologies, specifically cryptocurrency, blockchain and artificial intelligence (AI).
Holding back on a formal announcement, the RBI has discreetly formed a new unit to research and possibly supervise disruptive technologies through draft rules in the future, the Economic Times reported on Monday.
The unit has been operational for a month and already sees an as-of-yet unnamed general manager leading it, according to the report citing two sources aware of developments at the central bank.
keep a track on emerging technologies like cryptocurrency, blockchain and Artificial Intelligence (AI), the Reserve Bank of India (RBI) has introduced a new unit.
As per the sources, this new unit will conduct research and possible draft rules and supervise the tech-innovations in the future.
The central bank is also planning to set up data sciences laboratory in April along with professionals from computer science, data analytics, statistics, economics, econometrics and finance background. Idea behind forming this new unit, exclusively for emerging technologies, is to use data, analytics and real time information for different RBI functions like inflation targeting, banking regulations and policy enforcement. This unit on data sciences is likely to start in December 2018.
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“As a regulator, the RBI also has to explore new emerging areas to check what can be adopted and what cannot. A central bank has to be on top to create regulations. This new unit is on an experimental basis and will evolve as time passes.”
RBI Team to Track Crypto Developments
In an obvious attempt to improve its own capacity in the field, the Reserve Bank of India (RBI) has gathered experts in a newly formed unit that will be responsible for tracking crypto, blockchain and artificial intelligence technologies, The Economic Times reported quoting two sources familiar with RBI’s plans.
As a regulator, the RBI also has to explore new emerging areas to check what can be adopted and what cannot. A central bank has to be on top to create regulations. This new unit is on an experimental basis and will evolve as time passes.
No formal announcement about the new team has been made yet and the RBI has not responded to media queries for more details. Nevertheless, the publication notes that the unit was formed about a month ago and the bank’s management has already appointed its leader.
The outlet also quotes another expert on the topic. According to Piyush Singh, managing director of financial services for Asia Pacific and Africa at Accenture, unless regulators are part of the ecosystem, they understand and have a clear indication of what is accepted and what is not, they can neither protect the regulated industry nor the consumers who use it. Singh believes the RBI is doing the right thing at a time when new technologies are changing business models.
Researching, Despite Warning and Banning
The news about the forming of the research unit comes after multiple warnings against engaging in crypto transactions issued by the Indian central bank. In December of last year the RBI highlighted a number of crypto-related risks of economic, financial and legal character. This year, the bank ordered all regulated financial institutions to quit providing services to businesses and individuals dealing in cryptocurrencies.
Moreover, despite the ban, RBI isn’t giving up on the idea of a cryptocurrency completely. In line with central banks around the globe, the RBI too is mulling introducing a fiat digital currency called ‘Lakshmi’ coin, which would become an alternative to the Indian rupee for digital transactions, and unlike bitcoin which is a non-fiat digital currency, the new one will be fiat-cryptocurrency.
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In the meantime, Indian officials have been working on a regulatory framework for the crypto industry. Early statementsthat the draft regulations would be ready in July were later followed by another estimate – the Indian government is now expected to issue detailed cryptocurrency guidelines by September, as news.Bitcoin.com reported. Consultations with stakeholders are underway.
Do you think the RBI will eventually change its attitude towards cryptocurrencies? Share your thoughts on the subject in the comments section below.
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