No unit yet to track blockchain, cryptocurrency and AI at RBI

At a time when cryptocurrency, blockchain and artificial intelligence are seen as harbingers of major disruption in the global currency markets, the Reserve Bank of India still does not have a formal unit for tracking and policy-formation for such vanguard technologies.

In a reply to an RTI application by BusinessLine, the banking regulator has said that no new unit has been formally created in the bank.

BusinessLine had sought details of the sanctioned manpower strength, budget, equipment requirements, designation, academic and professional qualification of the unit head.

Units do exist in the RBI for important areas such as Financial Stability, Data and Information Management, Forecasting and Modelling, and HR Operations.

The lack of a formal unit flies in the face of the RBI’s own red flags raised over cryptocurrency trading in its 2017-18 annual report. “Though cryptocurrency may not currently pose systemic risks, its increasing popularity leading to price bubbles raises serious concerns for consumer and investor protection, and market integrity.

Notably, bitcoins lost nearly $200 billion in market capitalisation in about two months from the peak value in December 2017. As per the CoinMarketCap, the overall cryptocurrency market had nearly touched $800 billion in January 2018,” the report said. The report also added that rapid changes in the landscape of the payments industry, along with factors such as emergence of private digital tokens and the rising costs of managing fiat paper/metallic money, have led central banks around the world to explore the option of introducing fiat digital currencies. In India, an inter-departmental group has been constituted by the RBI to study and provide guidance on the desirability and feasibility of introducing a central bank digital currency.