Institute for Development and Research in Banking Technology (IDRBT), the Reserve Bank’s research arm has worked closely with the regulators, banks, financial institutions and clearing houses during the evaluation process. MonetaGo, a New York-based cryptocurrency firm served as a technology partner during the study.
The adoption of blockchain technology among stock exchanges and trade platforms is increasing. The potential of blockchain technology to automate trade settlements and transactions can prove to be a huge cost saver for financial institutions. Even Reserve Bank of India’s experiment involved the use of blockchain in a trade application and the results are now available in a white paper titled “Applications of blockchain technology in banking and financial sector in India”.
In the white paper, the central bank has concluded that blockchain is indeed a disruptive technology that can potentially revolutionise the financial industry. The successful proof of concept could pave the way for further in-depth research into a wide range of potential applications in the sector.
The Reserve Bank’s blockchain research follows a recent partnership between one of the Indian banking majors, ICICI Bank and Stellar. ICICI bank had announced its plans to develop a Stellar-based blockchain application for transactions within closed groups. Few other Indian banks working on blockchain technology includes Axis Bank and Yes Bank. Axis Bank, in partnership with Ripple, is set to offer cross-border payment services over distributed ledger.
Successful exploration of blockchain technology by the country’s central bank will also help the growing Indian Bitcoin community. In the recent days, the country has seen a dramatic increase in Bitcoin adoption and the government’s openness to the technology can translate to a lenient regulatory view towards the cryptocurrencies.