A number of companies and banks are adopting blockchain technology to reduce documentation and increase operational efficience.
Traditionally, trade finance involves complex documentation processes, high transaction costs, high settlement times and low authenticity rates with physical documents, As a result, a bank’s customer is straddled with delays, high costs and risks.
Blockchain technology allows all stages of transactions to be securely shared between network members, as opposed to each bank working independently, which is more expensive and increases the chance of error,
Cost reduction, risk mitigation, speed, traceability and security are among the multiple benefits the participants are seeing from the pilot.
Another area of business where the distributed ledger aspect of blockchain technology is appealing to Indian companies is in contracts.
These smart contracts can be used for information which forms the basis of KYC documentation, ensuring that details like name, address, and date-of-birth cannot be modified once they have been entered into the system.
International blockchain companies looking to enter the Indian market, such as Indonesia-based Pundi X, say that the Union government could learn more about how best to regulate cryptocurrencies and blockchain from smaller countries that have adopted the technology.
Blockchain is a very new technology and what one will see is that the use cases will principally come from smaller countries that are more receptive to adopting new technologies, such as Estonia, Lithuania, and Sweden.
Blockchain technology can be used to digitise and authenticate currently complex records like land holdings.
India, like many countries, has problems with land titles and ownership and this is where blockhain is developing.
The best use case is Sweden, which is putting all its land records on blockchain and it will quite quickly move towards doing land transfers and ownership verification using blockchain, which is a major issue in India currently.