India’s central bank formed a fintech department to address CBDC
India's central bank has made a committed division for fintech challenges, which includes a pair at their doorstep outlining cryptocurrency guidelines and a central bank digital currency(CBDC)
Reserve Bank of India(RBI) comes a fortnight had detailed with regards to India's farming of crypto guidelines saying that "while the RBI is adequately statted with specific departments to discharge these tasks," it still doesn't have a fintech department, just a division, leaving inquiries about efficiency and long-term commitment unanswered."
The RBI is working on two kinds of CBDCs, wholesale and retail, and the new office will now be tasked with regulating their development, India's parliament is set to consider regulations of cryptocurrencies. The RBI has unsuccessfully tried to "restrict" banks from managing crypto exchanges in the past.
The new division will be regulated by Ajay Kumar Choudhary who was selected by the RBI as executive director, saying he "will take care of Fintech Department, Risk Monitoring Department, and inspection Department,"
"You can expect much more action from Mr. Ajay Kumar Choudhary towards the Central Bank Digital currency." This might signify a shift from the RBI's position towards fast-tracking CBDC piloting," said a source with information on the matter.
The move is a long-in-coming recognition by the RBI to allocate resources and dedicated focus to the fintech sector. Experts had long complained that India did not have an adequately equipped and dedicated focus to the fintech challenges like the burgeoning crypto-sphere in India.
"It's a positive sign of aim to construct real regulatory capacity to oversee the fast-paced fintech industry," said Vivan Sharan, an innovation and policy expert who has worked with the government in the past.
"It is also a reflection of the Central bank's desire ti extend digital payments through a focus on innovation, and a recognition of the growing importance of different forms of digital money that will require supervisory bandwidth," Sharan said.
In June 2018, the RBI had formed a FinTech Unit in the Department of Regulation for going as a central point of contact in the bank for all activities related to Fintech.
The upgrading of that unit into its own department is aimed at promoting innovation in the sector, recognizing the challenges and opportunities associated with it and addressing them in a timely manner, and providing a framework for further research on the subject that can help policy interventions by the bank.
"All matters connected with the help of useful constructive innovations and incubation in the Fintech sector, which may have wider implications for the financial sector and falling under the purview of the Bank," will be dealt with by the FinTech Department." said the record.