India’s central bank has set up a specific department to deal with fintech issues, including two that are right on their doorstep: bitcoin rules and a central bank digital currency (CBDC). “This is a result of the challenges posed by cryptocurrency”, according to Amitoj Singh of the CBDC.
The move comes a fortnight after CoinDesk reported on India’s crypto regulations, stating that “While the RBI is adequately staffed with specific departments to discharge these tasks, it still does not have a fintech department, only a division, leaving questions about efficiency and long-term commitment unanswered.”
The RBI is developing wholesale and retail CBDCs, and the new department will be in charge of overseeing their development. Meanwhile, India’s parliament is ready to debate cryptocurrency rules. In the past, the RBI attempted but failed to “prohibit” banks from dealing with cryptocurrency exchanges. The move is a long-awaited recognition by the RBI of the need to devote resources and attention to the fintech sector. Experts have long argued that India’s institutions lack an appropriately prepared and devoted team focused on fintech concerns like the country’s booming crypto-sphere.
The RBI established a FinTech Unit in the Department of Regulation in June 2018 to serve as the bank’s principal point of contact for all fintech-related operations. The upgrade of that unit into its own department, according to an internal administrative circular seen by CoinDesk, is aimed at promoting innovation in the sector, identifying and addressing the challenges and opportunities associated with it in a timely manner, and providing a framework for further research on the subject that can aid policy interventions by the bank.
