The RBI, which is the Indian central bank monitoring banking in the country, has established a dedicated FinTech department. With this, the Central Bank aims to effectively regulate cryptocurrency in the country along with the upcoming Central Bank Digital Currency.
A recently published report by CoinDesk said that the Bank would be working on wholesale and retail CBDCs, which the new department will review and monitor. Ajay Kumar Choudhary, the chief general manager of the RBI, has been appointed as the director of the department. He will be operating the newly launched department. Additionally, Kumar Choudhary will also be looking into the Risk Monitoring Department and Inspection Department.
Since the crypto and the FinTech fraternity are evolving, it is also posing new challenges for India. The new department will be addressing these ‘new age challenges’ and set guidelines for the same. However, it is not the primary agenda, says the report.
Shantikanta Das, the governor of RBI, has often spoken against the use of cryptocurrencies in the country, warning the risks involved.
India has been at the forefront in drafting the regulations for the crypto trade in India. Although the bill appeared on the agenda of the budget session, it has not held conclusive discussions yet.
India is a country with one of the largest crypto investor numbers. Owing to the increasing popularity of cryptocurrency, the RBI is expected to come up with positive guidelines for the industry. With the new department being set within the central Bank, crypto guidelines and regulations will be out soon.
In an interview with a journalist, Subrata Das, Chief General Manager-in charge at RBI, stated, “All matters related to the facilitation of constructive innovations and incubations in the fintech sector, which may have wider implications for the financial sector, markets and falling under the purview of the Bank, will be dealt with the fintech department. All matters related to inter-regulatory coordination and internal coordination on fintech shall also be dealt with by the department.”
The FinTech department is expected to look into matters related to inter-regulatory and international coordination on FinTech. The department will be reporting the same to RBI’s central administration body.
“It is also a reflection of the central bank’s desire to deepen digital payments through a focus on innovation, and a recognition of the growing importance of various forms of digital money that will require supervisory bandwidth,” Sharan, an industry expert, stated while interviewing with media.
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