Despite India’s hostility against private cryptocurrencies, the country’s securities authority is developing a blockchain-based system for monitoring financial products.
The Securities and Exchange Board of India (SEBI), India‘s securities and commodity market regulator, has stated its aim to expand the use of blockchain technology in monitoring financial instruments in the country. Next Year, an Indian Regulator Will Adopt Blockchain Technology
SEBI revealed in a news release issued on the regulator’s official website that it is in the process of developing a new platform for “Security and Covenant Monitoring” of non-convertible securities utilizing distributed ledger technology (DLT).
The watchdog added that the new security system, which is scheduled to go operational on April 1, 2022, will rigorously monitor non-convertible securities and covenants, which are terms incorporated into a debt deal. Additionally, it will grant the parties involved the necessary approval. This comprises debenture trustees, issuers, and credit rating organizations, among others, to maintain data that is made accessible to other entities such as stock exchanges and depositories.
Because the regulator intends to create the system on the blockchain, it will give an additional layer of security and transparency to the system, as the data entered cannot be edited. SEBI stated that the data will be cryptographically signed, time-stamped, and sequentially added to the ledger, thereby ensuring a verifiable audit trail of transactions.
Additionally, the blockchain’s transaction history and data will be properly secured and shared with just the relevant parties on a “need-to-know” basis. The regulator continued by praising blockchain technology, noting how much safer it is for storing sensitive data than older systems.
“DLT has the potential to provide a more resilient system than traditional centralized databases and offer better protection against different types of cyber-attacks because of its distributed nature, which removes the single point of attack,”
The launch of the new system next year will be a watershed moment for the blockchain sector, as it will mark a significant step forward for the technology’s application within India’s financial ecosystem.
While the Indian government looks to be extremely receptive to the concept of blockchain technology, it has little interest in cryptocurrency. According to reports, the country’s authorities are considering permanently banning the usage of private cryptocurrencies such as bitcoin and ether.
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