Blockchain in India has been gaining traction over the past several months.
Blockchain is a decentralized, public ledger that provides important features like immutability to prevent data corruption, strong encryption capabilities to ensure safety of data and transparency.
The technology has received widespread enthusiasm and excitement and leading banks, financial institutions, supply chain corporations, tech companies have come together to explore what can be achieved using the blockchain. A lot of proof-of-concepts are being done, a lot of beta releases are taking place every week.
Today cryptocurrencies and smart contracts are hot topics in tech circles. I have written widely on some pretty exciting examples implemented using the blockchain technology.
The concept of blockchain oracles have also received warm response more so because it helps existing systems leverage the powerful features that the blockchain provides.
Not to forget, the tangle being implemented by IOTA that aims to improve on the blockchain when it comes to scalability.
As you can already see, there are a lot of things happening on the blockchain front everyday and there are newer developments taking place.
Governments across the world have taken cognizance of the disruptive nature of the technology and are exploring ways of improving governance through the same.
India is currently undergoing a digital revolution and blockchain is on the agenda of the authorities at the state or federal and national level.
This is a continuous effort to log the efforts being made to accept and implement the technology for various purposes like governance, etc. in India by the Government, and the citizens through collaborations, start-ups, etc.
Indian Banking System Acts Against Cryptocurrencies
The country’s central banking institution, the Reserve Bank of India has expressed its no-confidence on cryptocurrencies like the bitcoin.
The parent banking body has published a couple of press releases cautioning the users, holders, traders of cryptocurrencies against the potential economic, financial, operational, legal, and security risks involved in dealing with such currencies.
It further goes on to point out that it has “not given any license/authorization to any entity/company to operate such schemes” or deal with cryptocurrencies like the bitcoin, etc.
Although the RBI has not ordered closure of any accounts, banks in India are acting tough on several fronts.
Firstly, they are shutting bitcoin exchange accounts. This includes banks like State Bank of India, which is the nation’s largest public sector bank. Other banks include Citibank, ICICI Bank and HDFC Bank.
Secondly, they are restricting customers from trading in cryptocurrencies. Banks like HDFC Bank, Citi Bank have sent out notification to their customers stating that debit and credit cards issued cannot be used for trading cryptocurrencies.
This has led to a drop of around 90% drop in volume of bitcoin trade, as per a report of Economic Times.
In December, 2017 as the year was drawing to a close, the Income Tax department raided the premises of nine bitcoin exchanges which is seen as a major crackdown on cryptocurrencies.
More than 100,000 people involved in high volume exchanges of the cryptocurrency have been served notices by the IT Department of the country.
That’s just a part of it. As I said before, there is a lot happening on the technology adoption part.
The technology has caught the fancy of the governments at the federal and national level. Governments are tying up with private tech firms to understand and seek solutions to many problems in India’s governance.
Government Plans to Regulate Cryptocurrencies
A committee to this effect was formed in April, 2017 consisting of members from MHA, SBI, RBI and DEA which submitted its report in August, 2017. The committee recommended banning cryptocurrencies after holding rigorous discussions with leading Bitcoin exchanges and industry experts like the American Blockchain Council.
However, recently the Government has decided to set up another committee to develop a framework on how to regulate cryptocurrency. This seems like a step back by the Government.
The Government is planning to finalize its cryptocurrency related recommendations in 2018. These recommendations would lead legal changes and regulatory assignments. All such regulations is expected to be in place by 2018 end.
BankChain – First Major Initiative Related to Blockchain in India
BankChain is a community of banks in India and abroad with the sole aim of exploring, building and implementing blockchain based solutions.
Formed in February, 2017, by State Bank of India, the community has currently 33 banks as its members and 8 live projects that are at different stages of completion.
The other Indian banks include ICICI Bank, DCB Bank, Kotak Bank, South Indian Bank, National Payments Corporation of India, Bank of Baroda, IndusInd Bank, among others.
Some of the projects, the community is currently working on includes cross-border remittance, corporate KYC and charge registry, LoU, bank guarantees, employee background verification, document authentication, verification and storage, vendor on-boarding, etc.
Major partners of BankChain includes Primechain Technologies, Microsoft, Data Security Council of India, Intel, IBM, etc.
Blockchain and Insurance Sector in India
More than a dozen insurers in India are doing pilot projects to implement the KYC process in blockchain.
Some of these leading insurers include the likes of HDFC Life, Canara HSBC OBC have tied up to start the nation’s first blockchain project.
They have tied up with IBM and Cateina Technologies to create a blockchain-based solution on common interest areas which include providing customer KYC, claims history, medical records and agent track records while tracking fraudulent transactions.
Diamond Rides on Blockchain
India has become the first country in the world where diamond companies have started investing in blockchain technologies.
Surat-based diamond companies Dharmanandan Diamonds and Hari Krishna Exports are using the blockchain in India to track the stone’s journey from the mines to the customer.
Dharmanandan Diamonds has partnered with technology company Everledger to place its diamond-tracking data on to a blockchain platform. The initiative is named Diamond Time-Lapse Protocol.
Everledger’s diamond blockchain, launched in 2015 and Dharmanandan’s Diamond Time-Lapse has led to this collaboration which will now ensure that the information in Time-Lapse reports are encrypted directly on Everledger’s blockchain platform.
Consumers will be benefited by this since the entire report of the journey will be accessible on a mobile app. Other details might include origin of the stone including transactions and certification that it carries.
Andhra Pradesh Emerges as India’s Blockchain Hub
In 2016, the government in Andhra Pradesh aims to make Vizag as the FinTech capital of India. To make this happen, the government has tied up with a number of tech companies.
One of the major initiatives taken includes that of dealing with land fraudsters. In India most land records date back to the pre-independence era. 66% of civil cases pending with courts are property related.
The land ownership system is fraught with frauds. The Andhra Pradesh government wants to put all the land records on the blockchain so that whenever any deal takes place, all parties involved can track the same.
A Sweden-based startup, ChromaWay is in charge of building the technology that would allow people collaterise property.
Vizag-based firm Zebi Data India has been given the responsibility of dealing with land records. The firm will authenticate user credentials, and give them a certificate to access the records.
Vizag has also collaborated with Covalent Fund to develop India-focused blockchain stack. With the help of Velugu Core government will be able to access data through APIs. Later, it will let developers create a range of apps based on the available information.
The state government has also signed an MoU with Belfrics Global to set up an academy in Gitam University, Vizag. Also in March, 2018 the government has signed a separate MoU with ConsenSys, a New York based blockchain company to establish the first India cohort of ConsenSys Education.
A research and development center for cryptocurrency is on the cards in association with RC Bose Center for Cryptology and Security at the Indian Statistical Institute.
Work is in full swing to ensure that the state’s e-governance program and assets are secured on the blockchain by 2019 and aims to build the largest use cases in transport, finance and digital security through blockchain in India.
It’s clear that Andhra Pradesh is taking the lead when it comes to educating and implementing the blockchain in India. From adopting the technology to secure government data to training the police force to prevent cyber crime and creating specialized centers of excellence in partnership with Thomson Reuters, Broadridge for blockchain.
Blockchain to Revolutionize Real Estate Market in India
India’s land records mostly belong to the colonial era and putting them on the blockchain would greatly increase efficiency and reduce fraud.
The Government has shown a keen interest in digitizing land records through the Digital India Land Records Modernization Programme (DILRMP).
Implementing the blockchain to digitize existing records and setting a precedent for future transactions will ensure greater legitimacy, and decrease the chance of fraud.
Signzy’s Blockchain Solution makes the Banks’ Work Easy
This Bangalore-based startup takes the very complex KYC (Know Your Customer) process and makes it simple using latest technologies like blockchain and artificial intelligence.
They have developed a solution called Real KYC which verifies the background of customers, mitigates risks by detecting frauds, decreases operational expenditure by more than 70% and provides necessary contract management systems.
The company also claims that productivity increases by three times and the customer drop out rates decrease by 66%.
It has close to 50 clients which include leading banks, mutual fund companies, NBFCs, payment wallets and P2P lending platforms.
Maharastra to Trial Blockchain for Land Deals
The Governments of Maharastra has developed proof-of-concepts to secure land transaction related data using the blockchain and plans to do trial runs in certain areas of Pune and Konkan division of the state.
Once the trial succeeds, it will be rolled out in more cities or regions of the state. This will prevent hacking and tampering with land deals data making the process more secure and transparent.
Meanwhile, efforts are on to implement blockchain in more areas like supply chain, financial inclusion, goods and farm insurance, etc.
IndiaChain – NITI Aayog Strategizes on Blockchain in India
To the uninitiated, Niti Aayog is the central think tank created by the Indian Government.
IndiaChain is the name given to the Body’s ambitious project to develop a nation-wide blockchain network and link it with IndiaStack. IndiaStack is the digital infrastructure that forms the backbone of the Aadhar project.
The Body is working with state governments and central ministries to identify areas where the technology can be implemented and how to go about it.
This includes advisories to remain cautious while dealing with the hype surrounding the technology. A discussion paper is scheduled to be released in April, 2018 for feedback and stakeholder consultation.
A national strategy will be formulated after this.
The Body is already conducting proof of concepts in areas such as security of land records, security of records in agriculture and electricity distribution, pharmaceuticals, among others with leading tech companies and startups.
Niti Aayog has decided to test the blockchain in India in the field of education since it feels that the complexity is lesser.
One of these includes the India-China project with the idea of having a common blockchain infrastructure.
ASSOCHAM Study Finds Blockchain Beneficial
In a joint study titled “Role of trade finance for inclusive growth” conducted by industry-body ASSOCHAM and global consulting firm Deloitte, it has been concluded that blockchain when coupled with artificial intelligence, robotics can hugely benefit India’s trade finance system.
The study found that blockchain’s application in KYC process is very promising. This would be highly beneficial and make the process efficient at the bank, buyer, seller, SME’s end.
It also advises taking note of and solving certain implementation challenges such as on-boarding users, regulatory acceptance, infrastructural issues, etc.
Blockchain Foundation of India
The Blockchain Foundation of India is a community effort to promote the growth of blockchain-based initiatives in India.
BFI aims to bring together the state and central government, blockchain startups, CXO and leaders of the industry, blockchain enthusiasts on a single platform to ideate, inspire, participate, collaborate using the technology and transform the lives of the citizens of the country by supporting initiatives and generating employment.
The goal of BFI is three-fold: Firstly, to create awareness about the blockchain technology in a more Indian context. Secondly, to build a unified community to advocate for improved blockchain reception in India. And lastly, to accelerate Blockchain growth by making innovations in the blockchain sphere.
The members of BFI include leaders from the industry and blockchain startups like Microsoft, NPCI, Axis Bank, PwC, ICICI Bank, Nokia, Exide, etc.
NSE is Working on Blockchain in India
India’s largest stock exchange, the National Stock Exchange conducted a blockchain trial run for KYC data.
Others involved in the run included banks like ICICI Bank, IDFC Bank, RBL, Kotak Mahindra Bank, IndusInd Bank, and HDFC Securities. The technology was provided by Elemential, reports Coindesk.
The test involved the stock exchange in a shared environment. The stock exchange would upload customer related data on the blockchain and the partner banks who had permission to access the shared environment would get to access the information in real-time.
The team involved spent some time testing the system for resiliency. Simply put, the stakeholders attacked their own blockchain. The testing was conducted in late 2016 and the first phase ended in 2017.
DICCI to Start Bitcoin Mining Program
Pune-based Dalit Indian Chamber of Commerce and Industry (DICCI) have joined hands with social entrepreneur Tausif Malik to undertake special training programmes to generate self-employment to rural youth in their villages.
The Bitcoin/Crypto currency Mining Training Program (BMTP) will educate students across India on blockchain, mining and encourage entrepreneurship and business establishment.
The first training programme is scheduled to be held in May, 2018 in Pune.
Reliance’s JioCoin might Popularize Blockchain in India
Reliance is working on its own cryptocurrency called JioCoin and plans to build a 50-member team of young professionals aged around 25 years to work on blockchain related projects.
The customer royalty programme can be based on JioCoin. Reliance is very bullish on Internet of Things or IoT and blockchain is certainly going to benefit the conglomerate.
Apart from its cryptocurrency, the company aims to create decentralized applications or DApps and create smart contracts. The company hopes that the technology will help in supply chain management and logistics.
Indian Blockchain Start-ups Move Overseas
Thanks to the lack of a regulatory framework on blockchain and cryptocurrency and the clamp down by banks on bitcoin and other altcoin exchanges, blockchain start-ups in India have started moving overseas.
Additionally, many of them have also registered their companies in countries where cryptocurrency trading is legal.
Many blockchain start-up founders feel most countries are regulatory-friendly when it comes to Initial Coin Offerings (ICO) unlike India. Hopefully, 2018 will change the scenario.
Drivezy Shifts Base to the USA
This Mumbai-based online car rental platform had registered its parent office in the USA to offer ICO, through which it had raised $5 million.
Drivezy did not offer the ICO to India and China because the company was unsure of the laws regarding cryptocurrency in the country.
Will Healthureum Revolutionize Healthcare in India?
Public healthcare in India is pretty worrisome. Hospitals are lesser in numbers making patients travel a longer distance.
The waiting time for consultation and treatment is longer because of lack of skilled doctors and personnel, health insurance has not reached majority of the population and because of the poor condition of public healthcare, more people prefer treatment at private clinics which increases the cost.
Healthureum is an Estonia-based startup that uses the Ethereum platform to solve many of these issues in the long run by providing qualified personnel, access to cheaper loans and insurance, unique treatment plans, no waiting time and quicker access to one’s medical records.
Whether Healthureum succeeds in India will only be known after a couple of years, but at this point it seems it has ticked quite a few necessary check boxes.
Summing Up – My Take
In India, we are a country of 1.3 billion or 130 crores. Blockchain has the potential to root out corruption to a large extend and bring in transparency. It can increase efficiency in processes that otherwise sap a lot of energy from the common man of this country.
Andhra Pradesh excites me when it comes to FinTech and I see a lot happening there in the upcoming months. Close competitors would be the likes of Maharastra and Karnataka. Other states must pull up their socks not to miss the bus, because the next surge of employment is coming.
Startups are doing a good job with technology becoming more affordable for innovation. The Indian youth is now open to taking risks and enthusiastic about creating something new, which is a very healthy sign.
The start has been pretty exciting and promising. A PPP model to implement the technology to improve governance will certainly go a long way in making India a real superpower.