Belgium-based SettleMint, US-based Corda Applied sciences and IBM would supply know-how assist for the challenge pushed by the Reserve Financial institution of India’s (RBI) Innovation Hub in Bangalore, three folks accustomed to the matter instructed ET.
, and are additionally concerned.
The pilot challenge, known as ‘proof of idea’ in trade parlance, will harness blockchain know-how the place ‘blocks’ of transaction information are saved in ‘chains’ with peer-to-peer entry to reinforce traceability of cash movement.
“We’re taking part and supporting the initiative,” stated a Financial institution of Baroda spokeswoman.
The RBI, different banks and know-how companions didn’t reply to ET’s queries.
Completely different know-how suppliers are participating with choose particular person banks beneath the stewardship of the RBI.
“That is to evaluate how blockchain can facilitate and safe our banking system,” stated one of many individuals cited above.
Stopping LC Fraud
Tampering of paperwork like Letters of Credit score (LC) is among the challenge’s focus areas, and blockchain know-how will help stop the misuse of LCs.
The target is to make blockchain know-how part of the Core Banking System (CBS). This explicit challenge will take a look at the appliance of the know-how earlier than it turns into established apply.
“The pilot has begun with banks to run blockchain-backed programs to difficulty digital LCs,” stated an govt concerned within the course of.
Blockchain know-how is more and more gaining significance within the banking system. The RBI is probably going to make use of the identical know-how for the proposed central financial institution digital foreign money challenge, too.
Nevertheless, the pilot challenge targeted on commerce financing is totally different in scope and software from that concerned in constructing a digital foreign money.
About two weeks in the past, the RBI Innovation Hub, a completely owned subsidiary of the central financial institution, performed a three-day workshop with banks in Mumbai the place taking part lenders got hands-on buying and selling on Distributed Ledger Know-how (DLT), stated one of many folks cited above.
Blockchain is a distributed ledger that makes use of impartial computer systems to document, share and synchronise transactions in digital ledger, in keeping with the World Financial institution.
A few yr in the past, 15 banks had come collectively to determine a brand new firm that was supposed to make use of blockchain know-how for processing LCs. The corporate, christened as Indian Banks’ Blockchain Infrastructure Co (IBBIC), was meant to carry blockchain know-how to the forefront of the banking system within the aftermath of the LC scandal on the
. The present standing of the proposed firm is just not clear.
“We have no idea what is going on there as this RBI pilot challenge may effectively be another,” stated an official working within the blockchain area.
