RBI Creates New Fintech Department, May Take Up Crypto Issues

In what may be seen as a ray of hope for the otherwise cloudy future of India¡¯s crypto industry, the Central Bank RBI (Reserve Bank of India), has recently set up a new fintech department, according to an internal circular dated January 7, 2022.

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Purpose Of Fintech Department

This new department has been operational since January 4, 2022, as per RBI. According to the circular, this new unit will act as the central point of contact in RBI for all fintech-related activities, including supervision and regulation, and is expected to include crypto issues as well.

Also Read: Crypto-Assets Can Increase Financial Inclusion, Says Infosys' Nandan Nilekani

A Ray Of Hope Amidst RBI¡¯s Continuous Stance Against Crypto Industry In India?

The RBI has since forever been quite vocal in raising concerns over cryptocurrency, and has often raised red flags surrounding the potential use of crypto for illegal purposes, besides the lack of regulations on crypto which result in limiting RBI¡¯s ability to manage inflation, foreign exchange and the overall economy.

In fact, the RBI has on multiple occasions been in favour of a complete ban on cryptocurrency in India, most recently stating the same last month during RBI¡¯s 592nd central board of directors meeting held in Lucknow on December 17th 2021.

Earlier in 2020 as well, the RBI saw its ban on crypto trading lifted by the Supreme Court.

It's also important to keep in mind that the RBI has been working continuously towards a phased implementation of its own central bank digital currency (CBDC) soon.

And now with this Fintech department's setup, this step may be seen as a ray of hope for India's crypto future, especially if the department includes taking up of crypto issues, whether it's about regulations, challenges, suggestions or any other concern.

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The Tax Concerns

Despite the lack of clarity on crypto taxation in India, the Indian tax authorities have already been going after cryptocurrency exchanges for alleged tax evasion, while stakeholders too have for over a year been raising concerns about the lack of regulations for the country¡¯s crypto industry.

Also Read: From Bitcoin Crash To Regulatory Crackdowns: Top Crypto Predictions For 2022

What¡¯s Next?

Whether it's the taxation system or the expected ban/regulation on the crypto industry of India, everything remains to be seen until this much-anticipated bill gets tabled and passed in the Parliament, which may happen in the upcoming budget session later this month.

Until then, everyone¡¯s expected to keep a close watch on the RBI¡¯s moves as well, which in itself may be a signal of what India¡¯s Crypto Bill has in store.

Also Read: Govt Regulation Is Good: Five Crypto Startups React To India's Crypto Bill Noise

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