The Reserve Bank of India (RBI) has formed a new unit to focus exclusively on emerging technologies such as blockchain, artificial intelligence (AI), and cryptocurrencies.
While the central bank is yet to make an official statement confirming the move, it seems the new unit is aimed at boosting its intellectual capacity to regulate better, and benefit from these innovations in the realms of FinTech and ICT.
RBI’s Blockchain and A.I. Unit Become Operational
Citing unnamed sources familiar with RBI’s operational details, Economic Times reports that the RBI launched the new blockchain/AI unit nearly a month ago. The sources added that a chief general manager is leading the group without naming anyone in particular.
The sources also claimed that the new unit came up as the brainchild of Urjit Patel, the 24th Governor of the RBI, shortly after he took charge two years ago. Patel reportedly also coined the idea of setting up a data science laboratory, which has since been formally announced during the April 2018 monetary policy.
One of the sources further added that the new unit is currently in an experimental-phase and will continue evolving with time:
“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.”
Despite calls to make an official statement on the speculations surrounding the new unit, RBI has so far chosen to keep things under the wrap.
Will RBI Have a Change of Mind?
The RBI’s decision to (hopefully) pursue emerging technologies like blockchain, cryptocurrency, and AI with an open mind and on priority comes at a time when the country’s homegrown crypto industry is struggling against stringent regulatory measures.
The central bank, which has the final say on most matters about India’s banking and financial system, said during a court hearing this July that it was necessary to regulate the crypto industry to protect investors and the financial apparatus. Before that, it had forbidden all banking and financial institutions under its purview to refrain from serving institutions that deal in digital assets.
The impact of the crackdown resulted in a crippling effect on the still-nascent domestic crypto industry. Stakeholders affected by the move appealed to the judiciary to intervene on the matter, leading to the case now being contested at the Supreme Court of India.
A panel comprising senior government officials not directly linked to the RBI is currently assessing the possible regulatory steps that can be taken in the wake of increasing worldwide popularity of digital assets. To the relief of crypto-centric businesses and traders in the country, the panel has so far spoken against an outright ban. Instead, they seem to be of the view that the best way to move forward is to treat digital assets like commodities.