Is RBI Gradually Warming up to Cryptocurrency and Blockchain?

The Reserve Bank of India has consistently maintained an anti-crypto stance, but are the winds of change in motion? A recent research unit has been formed by RBI that has been tasked with the responsibility of researching and drafting regulations on emerging technologies, which also include blockchain and cryptocurrency.

It would be incorrect to say that blockchain has not been experimented with in India. For the most part of it, Indian government has encouraged the use of blockchain. For example, the government of Telangana has been extremely proactive in developing India’s first blockchain district in collaboration with Tech Mahindra. Several other blockchain related developments have been ushered in by Indian companies. However, due to RBI’s strict ban, cryptocurrency hasn’t found an opening in the Indian market, as of yet. People familiar with the unit said:

Although the Indian government is taking strides towards the use of blockchain — a distributed ledger technology — the RBI has banned banks and payments companies from extending any kind of services to blockchain-based cryptocurrency exchanges.

In case the unit concludes that Indian markets could benefit from crypto, RBI’s stance could potentially alter. The new unit that has been set up is just a month old and is yet to define how exactly it plans to go about setting up a framework and executing its duties. The general response from the industry has been positive. People are looking at this endeavour as a new and accepting approach from RBI’s side.

A similar committee had been set up back in November last year which was responsible for drafting the crypto framework of India. The Subhas Chandra-led Interdisciplinary Committee was a 10-member committee that had representation from RBI, SBI, Niti Ayog and other such important institutions. It is government backed and haS members from the finance ministry as well. However, it is yet to release its report.