India is a country holding a significant economy in the world which is currently witnessing fast growth of the use cases of the crypto market and blockchain technology. Considering the demand, the country is looking forward to design a road map for blockchain technology.
In the wake of the expansion of the emerging technology in the nation, The Institute for Development and Research in Banking Technology (IDRBT) has come out with a proposal of a blueprint of Blockchain Platform for the banking sector. IDRBT was formed by the Reserve Bank of India (RBI) to oversee research and experiments in the banking sector in 1996.
Till now, the country didn’t have any particular regulations for blockchain sector in India. Reportedly, IDRBT is associating with the Indian government, banks and industry players with an aim to create an interoperable blockchain platform. The blueprint by the institute suggests a vast idea of the adoption of the new technology in various business and organizations while having common protocols to handle interoperability among different entities. The protocol is anticipated to enable financial institutions to interact via decentralized platforms.
IDRBT emphasizes the requirement to develop a codified set of rules for smooth operations and collaboration. The institute has advised to hold a collaborative approach among all the stakeholders in a network. The IDRBT document notes, “Regulatory supervision can also be built within the governance structure. These steps are expected to help drive increased adoption of new technology among industry participants and continuous valuation and change management will help in bringing in required stability and sustainability of the new framework.”
Additionally, the authorities in the country are also concerned because of the increased risk over financial safety due to cross-border information security threats. Regarding the issue, R Gandhi, a Former RBI Deputy Governor stated that the banking and financial space 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.”
The Indian government has shown a bit reluctance towards the adoption of cryptocurrency, in 2018. In fact, RBI barred all banks from dealing with cryptocurrencies in April, considering a complete ban.