India’s central bank is setting up a financial technology department to keep up with cryptocurrencies
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El Reserve Bank of India (RBI) created a new department to identify challenges and opportunities in financial technology, particularly around cryptocurrencies. The new fintech department has been operational since Jan. 4, the central bank said.
As an account an account is essentially a whose purpose is to track the financial activities of a specific asset/ Quartz, Indian tax authorities are already pursuing cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. exchanges for alleged tax evasion, despite a lack of clarity on crypto taxes, while stakeholders have also expressed concern over the lack of regulations for the country’s cryptocurrency industry for more than a year.
The department could be active on the cryptocurrency front, in terms of framework regulations: the central bank has recently expressed its stance on virtual tokens. The RBI will provide a framework for future research on financial technology that could help policy interventions, according to a memo circulated last week.
Besides cryptocurrencies, experts think that the creation of the RBI’s central bank digital currency currency is a medium of exchange that defines value. will also be within its purview. The central bank announced plans for a central bank digital currency (CBDC) in July 2021 and a pilot test could happen as early as in the next fiscal year, starting April 1. In December last year, moreover, the RBI said it agreed to a CBDC with basic functionality. .
Call to regulate web 3.0
“There is speculation that recent calls to regulate Web 3.0 assets were one of the main catalysts for the new department.” says Arjun Khazanchi, co-founder and chief legal officer of decentralized decentralization refers to the property of a system in which nodes or actors work in concert in a distributed fashion to achieve a common goal. lending platform a place to buy, sell and store cryptocurrency Rooba Finance.
Indian venture capital capital is most commonly defined as the large sum of money you would use to invest. firms are betting big on Web 3.0 startups, as these companies are said to be the products for the next stage of the Internet, characterized by a decentralized ecosystem based on the technology Blockchain. Apart from that, there is a growing interest in crypto games that need RBI regulation.
According to Khazanchi, several financial services through digital modes, such as cross-border payments, peer-to-peer lending and asset management, require regulatory oversight. To help prevent distressed loans, the fintech department can require guidelines for borrowers and ensure proper compliance with lending protocol.
Lately, there have been cases of customers falling into the trap of fake loan applications. New RBI department can help in regulation and licensing of digital digital technologies are these electronic tools that have the ability to generate, store or even process data. lending platforms . Oversight of fintech entities, products and services will be a key function of the department, experts said.
“The digitization of financial services can also bring with it a number of risks, such as increased reliance on external service providers, mis-selling of financial products, data privacy breaches, unethical business conduct and illegitimate transactions. The regulatory landscape for fintech is evolving to address a place where cryptocurrency can be sent to and from, in the form of a string of letters and numbers. such risks.” said the RBI report.
The director of the department
According to the same bank’s press release on January 4, the RBI appointed Shri Ajay Kumar Choudhary as the new executive director, who will be in charge of the Fintech Department, in addition to the Risk Monitoring Department and the Inspection Department. Shri Choudhary holds a Master’s degree in Physics from Delhi University, besides having obtained professional qualifications, including the Associate Certificate from the Indian Institute of Banking and Finance (CAIIB).
Sources: Quartz India , Business Standard , Note from the RBI , archivo
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