The Reserve Bank of India (RBI) has formed a new internal unit to strengthen its own intellectual capital in the face of emerging technologies like cryptocurrency, blockchain and artificial intelligence.
Economic Times reported on Monday. This new unit will research and possibly draft rules and supervise new emerging technologies in the future.
The unit has been operational for a month and already sees an as-of-yet unnamed general manager leading it, according to the report citing two sources aware of developments at the central bank.
One of the sources reported added:
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.
RBI has formed this new unit even as it has more than once issued a warning on trading in cryptocurrencies.
RBI issued a circular in April to all regulated financial institutions – including banks – to forbid them from transacting or providing services to companies associated with cryptocurrencies.
Circular has had a crippling effect on domestic cryptocurrency trading and has seen crypto exchanges oppose the banking ban that is now a matter being contested at the Supreme Court.
The RBI’s executive director confirmed research toward a ‘fiat cryptocurrency’ in late 2017 with reports of naming the token ‘Lakshmi coin’ after the Hindu goddess of wealth and prosperity.
The RBI is also developing a data sciences laboratory of its own to enable and support multiple commercial banking applications in the country. The idea is to use data, analytics and real-time information for different RBI functions like inflation targeting, banking regulations, and policy enforcement. This unit on data sciences is likely to start in December 2018.