India’s RBI created a fintech department to solve the many emerging crypto challenges according to the latest documents that we have in our cryptocurrency news today.
The upgrading of the unit into its own new department will also promote innovation in the crypto sector. India’s RBI created a dedicated department for fintech challenges that includes framing crypto regulation and central bank digital currency. The move by the Reserve Bank f India came shortly after the reprots about India’s framing of crypto regulations saying that while the bank is staffed with the needed departments to perform these tasks, it still lacks a fintech department or a division that can solve questions on efficiency and long-term commitment.
The RBI is working on two types of CBDCs, retail and wholesale and the new department will be tasked with overseeing the development. In the meantime, India’s parliament considers the regulation of crypto as the bank already tried to prohibit the banks from dealing with exchanges in the past. The new department will be overseen by Ajay Kumar Choudhary who was appointed by the RBI and he will look after the Fintech Department, Risk Monitoring Department, and Inspection Department. According to a source familiar with the issue:
“You can expect much more action from Mr. Ajay Kumar Choudhary towards the Central Bank Digital Currency. This may signify a shift from the RBI’s stance towards fast-tracking CBDC piloting.”
The move comes after the RBI tried to allocate resources and dedicated its focus to the fintech sector with experts complaining for a while now about India’s institutions that didn’t have an equipped team that is focused only on fintech challenges like the burgeoning crypto sphere in India. Vivan Sharan as tech expert and policy expert noted:
“It’s a positive signal of intent to build real regulatory capacity to oversee the fast-paced fintech industry. 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.”
In 2018, the RBI formed a Fintech Unit in the Department of Regulation for acting as a central point of contact in the bank for everything fintech-related. With the upgrade of the unit into its own department, we can see a promotion of innovation in the sector and identify the challenges and opportunities associated with it in a timely manner. The documents show:
“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 by the FinTech Department.”
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