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RBI opens new department to regulate crypto exchange and formulate CBDC

RBI opens new department to regulate crypto exchange and formulate CBDC
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  • the RBI He was among the most vocal opponents of cryptocurrency in India.
  • The new department is being formed to oversee the new challenges coming from financial technology ecosystem, including encryption.
  • It is said that India will manufacture two digital central bank currencies, one each for wholesale and retail trade.

The Reserve Bank of India (RBI), the central authority that oversees banking in India, has opened a division dedicated to financial technology that will help set regulations for cryptocurrency and its upcoming digital currency for the central bank (CBDC), says a Coindesk report.

The report also stated that the bank is working on two types of central bank digital currencies – wholesale and retail – and that the new division will be tasked with overseeing their development. The department will be overseen by Ajay Kumar Chaudhry, who is currently the Managing Director of the Reserve Bank of India.

RBI’s Past With Cryptocurrencies

Certainly the department aims to oversee the “new age challenges” arising from fintech applications, and crypto is only part of its brief, meaning that while the department will oversee cryptocurrencies and the challenges they face, it may not necessarily be the first to start its agenda.

Reserve Bank of India, in particular the province Shaktikanta DasHe was one of the most vocal opponents of cryptocurrency in India. Das warned against the use of cryptocurrencies in the country on multiple occasions, and raised concerns about the increasing amount of wealth being invested in cryptocurrency trading in India.

While an accurate estimate of the total number of cryptocurrency traders and users in India is not readily available, the country’s largest cryptocurrency exchange has claimed to have millions of users.

Nischal Shetty, founder of WazirX, which is said to be the country’s largest crypto exchange by trading volume, claimed that the country had a total of 20 million crypto users in the fourth quarter of 2021.

Where does crypto law stand in India?

India is also drafting a law to regulate cryptocurrency for the better part of the year now. The bill in question first appeared on the agenda of Parliament’s budget session in January 2021, but was not brought up during the next session. Finance Minister Nirmala Sitharaman and other ministers also hinted at what the bill might contain, and it also appeared on the agenda of the recently concluded winter session of Parliament.

RBI’s move may come as good news for the industry, which has been asking for crypto regulations for a long time now.

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