As we have been reporting over more than one year, central banks still pay attention to the blockchain technology, highlighted at the beginning by cryptocurrency Bitcoin, but now finding even firmer ground as the digital currency. With even more volatility and uncertainty on the markets, due to the planned leave of the Great Britain, Indian central bank – the Reserve Bank of India (RBI) is launching a study of the blockchain technology and stashing forex reserves.
As the Times of India reported, the RBI is conducting its ongoing research with distributed ledger technology since it was discussed in December, 2015. The Deputy Governor H.R. Khan stated on June 24 that a special committee is about to be set within RBI to explore the use of blockchain protocol for the purpose of reducing the dependency on paper currency.
Khan told to reporters at a blockchain conference, held at the Institute for Development and Research in Banking Technology (IDRBT):
“Blockchain is one thing that has come out of Bitcoin which provides a lot of flexibility in terms of financial transactions. So, we need to study how this Blockchain technology can be used in financial transactions where the entire data systems move to some more levels.”
Even in December of 2015, RBI saw some advantages in this innovation, stating, “With its potential to fight counterfeiting, the ‘blockchain’ is likely to bring about a major transformation in the functioning of financial markets, collateral identification (land records for instance) and payments system.”
Nevertheless, RBI seems to be standing firmly on the ground, saying that the full potential is yet to be determined, and regulators should “keep pace with developments,” not exaggerating about positives of this new technology and possible future system for the financial sector.
According to The Times of India, Deputy Governor Khan explains:
“We have a group of officials from RBI, IDRBT and industry people which will look into this. There is a tremendous potential in Blockchain technology.”
As for the Brexit issue and situation post Brexit, Khan told reporters the impact will likely happen quickly, and the bank has systems in place to fall back on.
Blockchain financial technology is being monitored and studied to serve as additional safeguards and help the institution to work more transparently, fluidly, and in a more cost-effective manner. The bank seems to believe that applying blockchain technology could assist various aspects of the Indian banking system. Additionally, the bank is confident in its reserves and doesn’t seem threatened by the Brexit or global economic woes at the moment.
For any questions or recommendations, feel free to write us on hello@goforex.eu
