The importance of cryptocurrency in the mainstream continues to grow. This was further evidenced this week when the Reserve Bank of India (RBI) set up an in-house unit to track and manage the emergence of new technologies including blockchain and cryptocurrencies in the market.
What It Does
The new unit’s primary aim is to stay on top of the dynamic world of cryptocurrency. This includes tracking and reporting new and existing developments.
Beyond this, the unit will also aid in the development and management of new rules and policy to guide crypto transactions in the country.
The official statement read,
“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 Need for it
The creation of this unit is a deliberate move on the part of the Indian government to stay on top of the world of cryptocurrency.
New currencies are added every day to the market and as they become more prominent in mainstream culture, there rises a need for some form of government oversight.
Piyush Singh, managing director at Accenture says,
“Unless regulators are part of the ecosystem, they understand and have a clear indication of what is accepted and what is not, it can neither protect the industry it regulates nor the consumers who use it. This is true especially in the financial world where paper-based regulations are a passe’ due to the onset of digital technologies. It is extremely important and the right thing to do from RBI’s perspective.”
A Shaky Relationship
This new unit comes mere months after the RBI imposed a ban on banks dealing with crypto entities.
After Bitcoin recorded its ATH late last year, the RBI warned people of the “economic, financial, operational, legal, customer protection and security-related risks associated in dealing with virtual currencies”
Despite this warning, cryptocurrency is seeing record attention with more and more people getting involved.
This has fostered the need for the unit which is a few months old as of now though it is yet to have an officially stated head.
The unit, according to to the statement, is to be made up of economics, technology, statistics and computer science experts who will gather and analyze information on blockchain and crypto tokens in real time to the RBI.