The Reserve Bank of India (RBI) has just established a new internal unit devoted to researching and regulating new technologies such as cryptocurrency, blockchain, and artificial intelligence (AI). The RBI is currently holding onto an official release and quietly formed the unit to not only research, but supervise any disruptive technologies. This new unit is operational and has been for over a month. There are two sources saying that there is already a general manager leading the research and there have already been developments at the central bank.
One source stated, “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.” This new development though, comes at an interesting time when after years of public skepticism for cryptocurrency, including last April when the RBI forbid all financial institutions from working with any companies associated with cryptocurrency, the central bank said that it was necessary to regulate that sector during a Supreme Court hearing in July of 2018.
Despite all of their public misgivings about cryptocurrency, the research branch of the unit said that blockchain technology had “matured enough” to handle turning India’s fiat currency, the rupee, into a digital currency. There was a white paper published in January of 2017 backing these claims. RBI’s executive director has confirmed that research has been put toward a fiat currency reportedly named “Lakshmi coin” after the Hindu goddess of wealth and prosperity. The RBI is also developing their own blockchain platform to support many different banking applications that are just ripe for blockchain implementation.
As people are seeing with Venezuela and Russia, decentralization in the hands of those who wish to regulate it is a dangerous thing. Basing the nation’s capital on such volatility could inspire chaos, or something worse. Only time will tell where India’s motivations truly are.