The Central Bank Of India Forms A Crypto Research UnitAugust 27, 2018
It has been reported that India’s central bank, the RBI (Reserve Bank of India), has newly formed an internal unit which will be tasked with the research and regulation of emerging technologies. The main technologies that the unit will be concentrating on are Blockchain, cryptocurrency and artificial intelligence.
Unit Formed Secretly
Though there has not been a formal statement from the RBI, the Economic Times has reported that the central bank discreetly created the unit which would be in charge of researching and supervising the said disruptive technologies through a future implementation of draft rules.
The report, based on sources privy to the goings-on at the RBI, states that the unit has been functional for the past month and is headed by a yet to be named general manager. One of the cited sources reportedly said that with the RBI also acting as a regulator, it is actively exploring emerging technologies to ascertain which ones are going to be adopted and which ones aren’t.
The source went on to add that as a regulator, it is paramount that the RBI be aware of what is emerging in the market in order to prudently form regulations for them. The newly formed unit is reportedly only functioning as an experiment but would be evolving in the near future.
The Ban On Crypto In India
This comes as a surprise considering that the central bank of India has in the past been a staunch opposer of all things crypto, even cautioning the public from taking part in the sector. However, this stance seems to have changed as in a Supreme Court hearing last month, the RBI stated that it was important for the sector to be regulated.
In April this year, the central bank had sent out circulars to financial institutions forbidding them from enabling transactions from or even offering financial services to, crypto-based companies. This stand saw crypto related activities in the country be significantly affected, leading to crypto-based exchanges opposed to the ban seek legal action against it.
Government officials sitting in the panel tasked with deliberating on the sector’s regulations have reportedly stood against a blanket ban on the sector stating that cryptocurrencies may in the near future be classed as commodities.
India’s Digital Coin To Be Based On The Blockchain
Seen as significantly endorsing the technology behind cryptocurrencies, Blockchain, the central bank’s research branch has stated that the Blockchain technology has stabilized enough to be used in digitizing the Rupee, the fiat currency in India. The report was made public last year January.
The executive director of India’s central bank confirmed that the country was working towards having a national cryptocurrency that was at the time of the statement, late 2017, in the research stages. There were reports which indicated that the central bank would be naming it Lakshmi coin, after the goddess believed to be responsible for the provision of wealth and prosperity.
The RBI is in the process of developing its own Blockchain platform that will make it possible for it to carry out multiple financial applications.