The Reserve Bank of India (RBI) has reportedly established a new internal unit dedicated to researching and regulating new emerging technologies, specifically cryptocurrency, blockchain and artificial intelligence (AI).
Holding back on a formal announcement, the RBI has discreetly formed a new unit to research and possibly supervise disruptive technologies through draft rules in the future, the Economic Times reported on Monday.
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.”
The development comes at a time when the central bank – after years of public caution against trading cryptocurrencies like bitcoin – said it was necessary to regulate the sector during a Supreme Court hearing in July this year.
Earlier in April, the RBI issued a circular to all regulated financial institutions – including banks – to forbid them from transacting or providing services to companies associated with cryptocurrencies. The effect of the mandate 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.
Senior government officials – not directly associated with the central bank – who are part of a panel discussing regulations for the sector have ruled out a complete ban, insisting that cryptocurrencies are likely to be classified as commodities.