The Reserve Bank of India (RBI) will soon have its own specialized research unit that will work towards understanding the intricacies of cryptocurrencies and blockchain technology.
Relationships are fickle. One minute you like someone, the next you can’t stand them. Sounds similar to India’s love affair with cryptocurrency. While initially thriving in the country, virtual currencies have been given the cold shoulder thanks to the Reserve Bank of India’s (RBI) ban.
RBI Hopes to Understand the Industry
However, a possible reconciliation may be on the cards. The Economic Times has recently reported that the RBI is looking into understanding not only blockchain and AI technology, but cryptocurrencies as well. This may have been helpful before the ban was issued, but at least it’s a step in the right direction.
A source close to the project said:
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.
In addition to research, the unit will keep an eye on developing technologies and may even have the power to draft regulations.
While no announcement has been made regarding this new unit, industry professionals have nevertheless given their opinions. Piyush Singh, who is a managing director at Accenture, said:
Unless regulators are part of the ecosystem, they understand and have a clear indication of what is accepted and what is not, it can neither protect the industry it regulates nor the consumers who use it.
Singh, who deals with the company’s financial services in the Asia Pacific and Africa, went on to add:
This is true especially in the financial world where paper-based regulations are a passe’ due to the onset of digital technologies. It is extremely important and the right thing to do from RBI’s perspective.
The Power of Technology
The RBI seems set to explore different facets of technology, such as data analysis, to assist the bank with its various offerings and services. A unit to take on this task will be set up and ready to go in December this year.
Another source touched on this a bit, saying:
These ideas have all taken fruit after governor [Urjit] Patel took charge two years ago. Another similar idea is the setting up of a new data sciences laboratory, which was announced in the April monetary policy.
Perhaps this is a positive sign that RBI’s ban might be revoked. We’ll just have to wait until the 11th of September to find out.
Do you think this is good news for Indian crypto exchanges? Will the ban be lifted? Let us know in the comments below!
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