India’s Institute for Development and Research in Banking Technology (IDRBT) has published a blueprint on blockchain implementation in the banking sector, Indian daily newspaper the Financial Express reported on Tuesday, Jan. 22.
IDRBT was established by the Reserve Bank of India (RBI) in 1996 in order to conduct research and experiments in the banking sector. The organization is reportedly working with the Indian government, banks and industry players to build an interoperable blockchain platform.
Since there is no relevant regulation for the blockchain sphere in India, the blueprint purportedly presents a roadmap on the technology’s adoption in several areas and offers to establish protocols that would allow financial institutions to interact via decentralized platforms.
Former RBI Deputy Governor R Gandhi said that the banking and financial sector is vulnerable to more cybersecurity risks due to the “increased use of rapidly evolving, sophisticated, and complex technologies… increased use of mobile technologies by customers, including the rapid growth of the Internet of Things (IoT) and the heightened cross-border information security threats.”
Per the Business Standard, the road map also describes a built-in mechanism for regulatory supervision of the blockchain ecosystem. According to IRDBT, this will contribute to mass adoption of the technology.
The Indian government has demonstrated a mixed and sometimes hostile approach to crypto-related technologies in 2018. While RBI formally stopped all banks from dealing with cryptocurrencies in April and a government panel reportedly considered a complete ban, the RBI considered plans to launch a rupee-pegged digital currency.
Later that month, Indian police in the state of Jammu and Kashmir issued a warning on the possible risks related to investing in cryptocurrencies, reminding the public that they are not regulated by the government. Additionally, Indian Digibank allegedly closed several accounts involved with crypto activity, while Kotak Mahindra Bank, India’s second largest private sector bank by market cap, reportedly imposed crypto restrictions.