Reserve Bank of India (RBI) has recently released the Payment and Settlement Systems in India: Vision-2018 document. Among other things, the vision document intends to introduce a responsive regulatory framework for online payment industry of India and a customer liability framework to help resolve cyber fraud. The vision document has also expresed an intention to ensure contemporary and technology driven regulations in India. Perry4Law Organisation (P4LO) welcomes these positive steps on the part of RBI.
In order to ensure that regulations keep pace with the developments in technology impacting the payment space, the global level developments in technology such as distributed ledgers, blockchain etc. will be monitored, and regulatory framework, as required, will be put in place by the RBI.
Further, the payments eco-system is dynamically evolving with the advancements and innovations taking place, particularly in the area of FinTechs. In order to provide a platform for innovators to showcase their models to the industry, particularly in the areas of interest to payment systems and services, the Reserve Bank has organised an innovation contest through the Institute for Development and Research in Banking Technology (IDRBT). Learnings from such interfaces will also be used as inputs for policy adaptations.
RBI’s Deputy Governor H.R. Khan has recently informed that a group of experts will be constituted to study blockchain technology from a perspective of a evolving a more decentralised financial system and promoting cashless economy. The group would be small and draw its members from RBI, the Hyderabad-based Institute for Development and Research in Banking Technology and outside.
The legality of Bitcoin in India is a “grey area” and dealing in Bitcoin may be legal or illegal depending upon the way they are handled by the concerned individual or organisation. India is still discussing the legality or illegality of Bitcoin as RBI has to come up with a conclusive regulatory framework in this regard. The crucial question is whether Bitcoin use, websites and businesses are legal in India? There is no conclusive answer to this question as on date and the safest bet is to ensure techno legal compliances for Bitcoin businesses in India. The prominent of these compliances is the cyber law due diligence (pdf) that most of the e-commerce businesses and Bitcoin websites are not complying with.
Perry4Law Organisation (P4LO) wishes all the best to RBI and is committed to extend its techno legal expertise to help studying and implementation of Bitcoin and Blockchain technologies and other forms of online payment mechanisms in India.