Adoption of Blockchain in India
Blockchain technology can play a massive role in collaborative governance and effective distribution systems for our society.
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Cryptocurrencies and the underlying blockchain technology has been the leading news maker in the recent years, with a lot happening across the globe. Some forward looking governments embraced the disruptive technology effectively, whereas the authoritative governments tried to shun the technology to retain the grip on the monitory system. Banks and major financial institutions have taken a u turn and have realized the fact that adopting the technology would be a key element if they have to be the preferred financial institution for the next generation. Irrespective of whether the central authorities and financial institutions are backing up or not, the technology is going to inroad deep in to multiple sectors with financial sector getting the major benefit of the technology.
In order to make sure that they are not left out, the financial institutions have adopted a model to make their existing system more efficient and cost effective by using the blockchain technology rather to test out a completely new solution, that we might not have experienced or even dreamt off. When it comes to governments and institutions in Asia, the approach is more conservative. This conservative approach to experiment with the new technology will cost us time, revenue and future dominance in these sectors.
The blockchain technology provides the much needed efficiency, transparency and cost effectiveness, which no existing technology was able to provide. When our existing money transfer system can take even up to 5 days to settle with risk of possible counterparty failures, $2 to $3 billion worth of transactions are carried out through cryptocurrencies on a daily basis with impeccable precision, accuracy and immutability. To add to that, these transactions are carried out seamlessly in a very short time without the need of any intermediary, clearing house, or central banks. Many of the departments of the existing systems will become obsolete if blockchain technology is used to carry out transactional services.
Even though India produces maximum number of skilled tech force, India’s adoption to new age technology on a larger scale has been always resistive. With the blockchain space, the approach was slightly better. Yes bank, ICICI, Axis and RBL have specific accelerator programs running specifically for blockchain related applications. We have clear-chain, a collaborative permissioned blockchain project by Indian banks to share AML related information has also been a good initiative. We have Andhra Government, who has identified Blockchain as one of the 4 key sectors that can impact the state effectively in terms of governance and modernization.
For a massive consumer base like India, these efforts are very much negligible. More than half of our population does not have proper access to banking solutions, out dated health care distribution system, inefficient governance and most of all, lack of access to funding solutions are prevailing hinderance to the collective growth of the communities within the country.
Blockchain technology can play a massive role in collaborative governance and effective distribution systems for our society. The current efforts are concentrated on how the payment can be processed faster, how the stock and other asset classes can be transferred from one person to another, how vehicle registration system can be brought on the blockchain and how health records can be shared between the hospitals seamlessly. The blockchain can do much more than this.
The massive potential of our country can be unearthed provided we empower our diversified communities with opportunities and access to efficient funding mechanism. The blockchain and cryptocurrencies can play a major role in funding mechanism. One such project is initiated by Belfrics, a blockchain development and crypto exchange firm. Belfrics is launching a KYC compliant blockchain, that can enable various communities to create their own funding mechanism and collective governance. For example, A remote village paddy farming project can be run using a smart contract on Belrium blockchain wherein the funding can be effected by the end users of a supermarket. The investors can secure their fair share of organic produce along with potential dividend from the excess income the smart contract has generated.
Out of the box thinking will be needed by fintech and Indian financial institutions to make best use of the blockchain space.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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