There has been an increasing understanding that there are corporations and governments dislike the cryptocurrency sector. However, governmental organizations are more excited about the blockchain technology underneath it all.China has been cracking down on cryptocurrency for several years. This leaves many wondering if India would shift the narrative. There has been an ongoing debate about whether the country, which is also home to one of the world’s largest economies, and one of the fastest growing economies, would finally embrace cryptocurrency. While it is clear that India is not ready to take that step, the Reserve Bank of India (RBI) is certainly open to the potential of blockchain.
Reserve Bank of India Blockchain Platform
A report from the Hindu Business Line shows that the bank has been actively working to develop blockchain technology for some time now. This has been taking place through the research and development arm of the RBI. It is known as the Institute for Development and Research In Banking Technology (IDRBT). The director of the IDRBT, AS Ramasastri, is noting that:
“While there is huge scope for deployment of blockchain applications, a cautious approach is very much needed.”
The RBI is also seeking how analytics will revolutionize financial systems. This includes how cybersecurity is involving presently. In addition, this includes how blockchain will change the payment system sector.
This is quite significant to India itself. Consider that many believe that one of blockchain’s most relevant use cases is that it can transform the remittance sector. This is huge business for India, which remains the country that receives the most remittance in the world. Ramasastri believes that 5G may play a role in the future of banking.
“We have been working on a model platform for blockchain applications for the government in banking. It will be documented and developed next year.”
A New Approach
It certainly isn’t that surprising why the RBI is cautious about utilizing blockchain technology. The RBI hasn’t exactly made friends in the cryptocurrency sector, as it has remained cautious about the anonymity nature of cryptocurrency transactions and the intrinsic value of cryptocurrencies themselves for some time now. The RBI’s crypto ban has effectively cripped the cryptocurrency investor ecosystem in the country, which is a devastating blow to Indian cryptocurrency exchanges, considering that India is home to 1.4 billion people, many of whom might be interested in investing and/or trading.
There are also many cryptocurrency exchanges that have folded, blaming the RBI’s actions. Zebpay, India’s largest cryptocurrency exchange, was forced to shut down last year. Koinex, another one of India’s cryptocurrency exchanges, announced in a Medium post several days ago that they were forced to shut down operations.
While many cryptocurrency investors were hoping that India would embrace blockchain as an emerging company, they were dismayed to find that the Indian government and the RBI seemed to be more concerned with cracking down than anything else. Regardless, it appears as though the RBI seems to recognize the potential of blockchain. This is true even if their stance on the Indian cryptocurrency exchanges hasn’t changed.