India’s Central Bank Starts a Crypto Research Unit

The crypto industry is still relatively new. And often times, the crypto market is misunderstood. Bitcoin was a product of the 2008 economic crisis. And so far, regulators still haven’t figured out completely how to approach cryptocurrencies. The good news is that there are changes happening all over the globe that favor cryptocurrencies. You have the US Securities and Exchange considering both Bitcoin and Ethereum as a commodity.

In addition to this, there are those looking closely at the possibility of a Bitcoin ETF. Though there were a number of Bitcoin ETFs that have been rejected recently, the US SEC decided to review its decision. And also, VanEck’s Bitcoin ETF application is believed by many in the industry for having a strong chance of getting approved.

But of course, there are still those countries that aren’t exactly open-minded regarding cryptocurrencies. You have China that has renewed its efforts towards banning crypto-related activities in the country. And also, you have India. India’s Central Bank ordered that banks should never transact with crypto exchanges.

This banking ban has been aimed towards crippling domestic crypto trading activities. However, crypto exchanges fought back and the case is now being settled at the Supreme court. There are senior government officials that are part of a panel discussing crypto regulations ruled out the complete ban on cryptos insisting that cryptocurrencies are likely to be classified as commodities.

Forming a New Internal Unit For Crypto Research

But is India’s Central Bank really closed minded regarding the crypto industry? It was reported that the Reserve Bank of India established a new internal unit that will be in charge of doing research and regulating new emerging technologies. These new technologies include artificial intelligence, cryptocurrency, and blockchain.

However, there was no formal announcement regarding this move by the RBI. In fact, it was a discreet move by India’s Central Bank. The unit has also been in operation for a month now. And also, it is overseen by an unnamed general manager.

Over the years, India’s central bank insisted that the public should be cautious when it comes to trading cryptocurrencies such as Bitcoin. In July, it even mentioned that it is a necessity to regulate the sector.

Is The Crypto Market Matured Enough?

The research arm of India’s central bank actually believes that blockchain technology is mature enough that it can enable the digitization of India’s fiat currency. Could this mean that we are going to see a digital version of the rupee soon? RBI’s executive director has confirmed that they are doing research to a possible “fiat cryptocurrency” in late 2017. It was said that the token is going to be called “Lakshmi coin” which is named after the goddess of wealth and prosperity.

This isn’t something new these days. There are the likes of Iran and Venezuela that are working on their own national cryptocurrency.

The RBI is also looking to develop a platform that can enable to support commercial banking applications. And all of these developments are being made because RBI thinks that there are several areas that are ripe for blockchain implementation.