In a special keynote at the Moneycontrol Startup Conclave, RBI’s Deputy Governor, T Rabi Sankar spoke at length about the Fintech sector – The role its playing to achieve financial inclusion and its regulations.
“RBI is closely watching the evolving space of Fintech. Innovations are happening across three elements: time, access and data. New innovations are helping in driving down costs, refocusing products and services and improving customer reach and services. There are no Fintech regulations right now. We are talking to the industry and understanding whether there is a need to regulate them. Can't give a timeline at the moment. But it will come only after consultation with them,” he added.
“We at RBI need to understand how Fintechs are evolving and innovators are thinking. But the young innovators' focus is on innovations and not as much on regulations yet and we need to find that balance. We time our intervention so that the industry (Fintech) is allowed to grow,” he said.
Speaking on cryptocurrencies, RBI’s Deputy Governor said, “People trading crypto is not the concern but the unbacked cryptocurrencies and the product itself alongside its backers is the problem.”
He also highlighted that stablecoins pegged to other currencies in emerging market economies pose several threats.
“Stablecoins pegged to currencies, for example USD are not a risk to the USA. But stable currencies pegged to other currencies in emerging market economies (EMEs) pose very serious financial stability, capital management, and monetary policy risks," Shankar said.