Despite an infamous crackdown on digital assets, the Reserve Bank of India (RBI) has created a task force to explore avenues and unique use-cases pertaining to blockchain technology, artificial intelligence and cryptocurrencies.
Task Force to Regulate Burgeoning Sector
The Indian Express recently reported that the RBI-led unit will supervise the burgeoning asset class and big data technologies, draft rules and regulations relevant to local sentiment, and conduct research to understand the three domains.
A person familiar with the RBI’s plans noted the bank has to “explore new areas” and emerging technologies before deciding on what must be adopted and what cannot. That said, the bank’s responsibility is to oversee the far-reaching effects of new fintech instruments and create optimal regulations. The person familiar with the matter went on to say:
“This new unit is on an experimental basis and will evolve as time passes.”
The committee is over a month old and is led by an unidentified chief general manager; however, a formal statement in this regard has not been issued.
Industry Observers Speak
Market analysts commented the RBI is “doing the right thing” when technologies like cryptocurrencies and blockchain seem primed to augment, or change, entire businesses.
Piyush Singh, director of financial services at Accenture Asia Pacific, noted that regulators are inevitable for any burgeoning ecosystem–as they understand such technologies, define clearly what is accepted by the state and seek to actively regulate industries while protecting customer interest.
“This is true especially in the financial world where paper-based regulations are a passé due to the onset of digital technologies. It is extremely important and the right thing to do from RBI’s perspective.”
Interestingly, the RBI unit was formed despite the bank’s strict stance against cryptocurrencies. The agency has banned all Indian banks from providing services to cryptocurrency businesses and is known to crack down on Bitcoin traders in the country.
Cover Photo by Mitchell Ng Liang an on Unsplash