The Reserve Bank of India is working on constituting a team to study the use of blockchain technology – the tech underpinning cryptocurrencies such as bitcoin – to reduce the use of hard cash, Moneycontrol reports.
RBI Deputy Governor H R Khan said this during an event organized by the Institute for Development and Research in Banking Technology (IDRBT),
Blockchain is one thing that has come of Bitcoin which provides a lot of flexibility in terms of financial transactions. So, we need to study … how this blockchain technology can be used in financial transactions where the entire data systems move to some more levels.
Officials from RBI, IDRBT, and other industries will look into the digital currency technology.
The blockchain technology enables users to transfer money without any regulation or oversight, and there have been reports of this P2P pseudonymous system being used to launder black money, finance terrorist activities, and fund child pornography. The Reserve Bank of India had cautioned the users of virtual currencies against the risks on Dec 24, 2013.
The blockchain has been gathering support in fintech hubs such as London, New York, Singapore and others, and businesses expect the technology to reform their processes due to its low-cost, high-speed and reliable specifics.
H R Khan also talked about the potential impact of Brexit on India. He was confident about the strong fundamentals of the Indian economy and said that RBI has enough tools and reserves to handle the rupee volatility.
“We are closely monitoring. Given our macro fundamentals, certainly we will be affected by what is happening globally. But… we are in a much better position to weather the storm. We are not in those earlier days of Fragile Five or Turbulent Tens.”
India is now one of the world’s fastest growing economies.