Unafraid of Brexit, the Indian central bank is accelerating its research on blockchain technology

Central banks have always been very fond of blockchain technology. Today, Brexit has brought great instability to the world economy, and the Reserve Bank of India (RBI) has also begun to accelerate the pace of research on blockchain technology and increase foreign exchange reserves.

The Reserve Bank of India, which is responsible for issuing the rupee (India's official currency) and formulating monetary policy, has been working non-stop since it began to show interest in distributed ledger technology in December last year.

Just on June 24, Deputy Governor HR Khan announced that the Reserve Bank of India will set up a special working group to study blockchain protocols to reduce dependence on paper money.

Khan said at the IDRBT Conference:

Blockchain technology improves the flexibility of financial transactions. Therefore, in order to achieve data system upgrades, we must accelerate the pace of research.

As early as 2013, the Reserve Bank of India publicly expressed its determination to oppose the use of Bitcoin. Soon after, it stated that blockchain technology is beneficial to the traditional financial system. In December 2015, the Reserve Bank of India pointed out the innovativeness of the blockchain protocol in its annual summary:

Due to its anti-counterfeiting properties, blockchain technology can promote the transformation and upgrading of industries such as financial markets, collateral authentication (such as title registration), and payment systems.

However, the Reserve Bank of India also mentioned that the potential of blockchain technology remains to be proven and the government needs to keep pace with industry developers. Now, the global economic turmoil has led the Reserve Bank of India to put blockchain technology on the agenda again. Khan said:

Verified by senior bank officials, members of the Banking Technology Development and Research Conference, and industry professionals, blockchain technology does have unlimited potential.

When asked about the domestic situation in India after Brexit, Khan said that Brexit has impact on the global economy, but the banking system is capable of handling these problems.

The central bank has a very strong regulatory system. Because our banking system is so large, it is very vulnerable to certain international events. But we have a strong system that can help us get through the difficulties.

To prevent sharp fluctuations in the rupee price, the Reserve Bank of India has now increased its foreign currency reserves to US$363 billion.

Advanced financial technology can help governments and enterprises improve system security while achieving transparent, efficient and low-cost operations. The Reserve Bank of India seems to believe that the application of blockchain technology can help promote efficient operation of the system.
In addition, the Reserve Bank of India is very confident in its currency reserves and believes that Brexit or global economic difficulties do not pose much threat to India.