India’s Central Bank to Research Cryptocurrencies Despite Banning Banks from Bitcoin Transactions
The Reserve Bank of India (RBI) has formed a new unit within the central bank to beef up its own intellectual capital in the face of emerging technologies like cryptocurrency, blockchain and artificial intelligence.
The newly formed unit will research and possibly draft rules and supervise new emerging technologies, The Economic Times reports citing two people familiar with the central bank’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,” said one of the sources.
This new unit is reportedly just about a month old and even though a chief general manager is identified to lead it, a formal announcement internally has not been made yet.
Notably, the RBI’s plans to research cryptocurrencies and their underlying technologies come after it has repeatedly issued warnings about potential “economic, financial, operational, legal, customer protection and security-related risks associated in dealing with virtual currencies”.
As ForkLog reported, in April this year India’s central bank has banned financial institutions from dealing with cryptocurrency exchanges, citing concerns about money laundering and a threat to financial stability. Indian Bitcoin enthusiasts described this decision as a restrained first step towards imposing an outright ban on cryptocurrencies that have recently exploded in popularity in the country.
Last month, local news outlets reported that the Indian Supreme Court is expected to issue a comprehensive set of cryptocurrency laws and regulations by September.
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