Reserve Bank of India appears keen on blockchain but not on crypto

It was recently reported that the Reserve Bank of India (RBI) is developing blockchain technology through its Institute for Development and Research in Banking Technology (IDRBT). This is intended to create a decentralized platform for use between banks and the government. While it would appear that the central bank is supportive of blockchain with this initiative, it has historically been hostile towards cryptocurrency.

IDRBT Director AS Ramasastri spoke to Business Line about the new project they are working on and he noted how they will be quite cautious in their approach. The model should also become available soon.

“We have been working on a model platform for blockchain applications for the government in banking. It will be documented and developed next year,” he said. “While there is huge scope for deployment of blockchain applications, a cautious approach is very much needed.”

The R&D arm is also looking into further development with regards to the fintech industry. As such, the IDRBT is also discussing the matter with companies in the field.

“The dialogue is on and we are expecting good outcomes from this exercise,” Ramasastri noted. “Fintech companies are accelerating and reshaping the financial services industry radically.”

Missing from the conversation was any mention of cryptocurrency and the trading of digital coins, and this is only to be expected. The RBI has been notorious for clamping down on crypto activities in India, Cointelegraph points out.

The banking ban imposed by the central bank last year led a number of crypto exchanges in the country to close their businesses. Earlier this month, reports suggested that the inter-ministerial committee led by the Indian Department of Economic Affairs secretary Subhash Chandra Garg has proposed a draft bill that seeks to make it illegal to hold, sell or deal in cryptocurrencies in the country.