With the increasing boom of the emerging technology including blockchain, cryptocurrency and virtual intelligence, the Reserve Bank of India has decided to create a new unit to regulate these technologies.
According to a source, RBI has to have a regular update and profound knowledge of these emerging fields to check whether it is acceptable or not. Though this new unit is an experimental prototype which will advance gradually with time. The unit working domain will include researching and drafting rules to inspect and examine these technologies.
Though RBI’s circular specified in April 2018, that no bank or individual is permitted to offer or accept any cryptocurrency services in India.
“As far as the ring-fencing controlled units from cryptocurrencies are concerned, digital tokens allotted by private parties are receiving consideration worldwide for analytical value.” Said BP Kanungo, the Deputy Governor of RBI. “The supervisory actions for virtual currencies are not uniform throughout the globe which has affected the digital market and capital control adversely. If these cryptocurrencies grow unconditionally and cross the threshold, they can disturb the financial stability as well. RBI has been constantly warning the citizen about the risks of adopting cryptocurrencies and the damages it can cause to the constancy of the financial market. As a response to the increased risk due to cryptocurrencies, RBI has decided to ring-fence their entities from the jeopardy of dealing in virtual currencies. Within three months’ time, dealing in virtual currencies should be stopped”. He added.
Later, a Right to Information (RTI) report claimed that no research has been performed by RBI regarding this subject. Neither a committee has been set nor the responsibilities have been allotted to a specific officer or team to comprehend the behaviour, protocol and usage data of cryptocurrencies within India or worldwide.
On the contrary, Subhash Chandra Garg who is the Secretary of Department of Economic Affairs declared the formation of a new committee which is designated with the work to draft rules and regulations for cryptocurrency trading in India. The date of its release is not being revealed yet, though it is estimated to come into being somewhere in September.
All the controversies leave an underlying question for the hour: if the Reserve Bank of India has shown repulsion against this technology, then why are they prompted to introduce a new committee dedicated to the supervision of virtual currency?
Is the new unit formed because of the reducing trust of the central bank on the existing committees?
RBI has been really concerned about the disruptions and risks of adopting virtual currencies and has set a committee to stop the use of cryptocurrency. Then why is a new committee formed to regulate and supervise the deals in cryptocurrency?
Well, it seems like waiting and watching is the only option we are left with.
We hope this article added a bit of good knowledge in you. You may also want to check out this Fraud by BitConnect caused investors to lose Rs 22,000 crore