Central Bank of India Forms Research Unit For Cryptocurrencies, Blockchain And Artificial intelligence

Central Bank of India has fired the first warning shots and made it known it will not lag behind as other countries invest big on emerging technologies. The country’s de-facto central bank has quietly formed an internal unit that is to explore emerging technologies such as Blockchain, artificial intelligence, and cryptocurrencies.

The agency has tasked the unit with the responsibility of researching the new technologies and coming up with draft rules that will govern them. The unit is also to provide advice on the technologies that are to be adopted’ and what cannot.

“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 people cited above,” RBI in a statement.

The formation of the unit comes months after the central bank issued a notice asking all financial institutions to desist from facilitating cryptocurrencies related activities. However, the authority has continued to maintain a keen interest in blockchain technology that powers virtual currencies.

The ban on cryptocurrencies has not gone well with most people including senior government officials.  Faced with a dilemma on how to go about the same, the agency now appears to be open about pursuing regulation of the sector rather than issuing a complete ban.

Hearings in the Supreme Court, on the cryptocurrency ban, appear to have reinvigorated hopes that the central bank may as well be considering a turnaround from the ban. By essentially calling for regulation of the cryptocurrency sector the agency appears to be rethinking its position.

Amidst the cryptocurrency standoff, The RBI has continued to reiterate its commitment and endorsement of blockchain technology, which it insists has matured enough. A white paper in the public domain already alludes to the possibility of digitizing the country’s fiat currency, the Rupee, into digital currency, in keeping up with the emerging trend.

The RBI is also working on a platform, which once complete will support multiple banking applications and allow businesses to share a system of records. The technology is also expected to lead to cost savings by enhancing fraud protection, enabling faster statement and reducing forex volatility.