Cryptocurrencies and Blockchain have formed a love-hate relationship with many governments. The Reserve Bank of India (RBI) reportedly formed a special unit in an attempt to comprehend the digital assets better.
Though a formal announcement hasn’t been made by RBI and the RBI has not responded to media queries for more details. The EconomicTimes reports that the central bank of India has initiated a special unit that will track emerging technologies and enhance its knowledge about the development of digital assets, the blockchain, and artificial intelligence applications. One of the individuals cited in the article stated:
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.
According to the reports, the members of the new unit will supervise the sector and are expected to draft rules for the same in the near future.
RBI’s Team of Experts
The action reflects RBI’s intend to improve its own capacity in the field. The report notes that the unit was formed about a month ago and the bank’s management has already appointed its leader. The Economic Times also quotes another industry veteran, Piyush Singh, managing director of financial services for the Asia Pacific and Africa at Accenture,
Singh observes that the regulators need to be a part of the ecosystem to comprehend what is acceptable and what is not. A half-baked decision would not regulate the industry nor would it protect the consumers who use it. He believes that RBI is making right choices given that the new market is changing business models.
Crypto Ban In India
Like many governing nations, India has been cautious about allowing cryptocurrency. The news about the formation of the new research unit comes after multiple warnings engaging in crypto transactions issued by the Indian central bank. Last year, in December, RBI cited a number of crypto-related risks of economic, financial and legal character. This year it prohibited all regulated financial institutions to provide services pertaining to cryptocurrencies.
Despite a number of challenges by the representatives of the crypto sector, the Ban went into effect in July. The supreme court of India did not lift the ban in India, though a final hearing is scheduled for September 11.
Meanwhile, Indian officials are busy spelling out the regulatory framework for the crypto industry. It is expected that the Indian government will issue detailed cryptocurrency guidelines, by 2018 end.