Leading Indian banks are invited to participate in a blockchain finance project by the Reserve Bank of India. The central bank is collaborating with over a dozen esteemed organizations to introduce a blockchain-based pilot project with a trade finance focus. This includes financial institutions, including the State Bank of India, ICICI Bank, and HDFC Bank.
It will aid in preventing loan fraud and fraud if the pilot testing is effective. This occurred at a period when con artists used fictitious cryptocurrency exchanges to steal approximately $128 million.
SettleMint from Belgium, Corda Technologies from the US, and IBM will provide technical support for the endeavor coordinated by the RBI Innovation Hub in Bangalore, according to three people who know the matter. The Union Bank of India, Axis Bank, and Bank of Baroda are all involved.
Blockchain technology will be used in the project, known as the proof of concept, to enhance the traceability of money movement. Combating the manipulation of papers like Letters of Credit is one of the project’s primary target areas (LC). Blockchain technology can help stop LC abuse and any modifications by doing so.
The objective is to integrate blockchain technology into the Core Banking System (CBS). This particular project will evaluate the technology’s suitability before it becomes commonplace.
On the one hand, the Indian government appears to be quite enthused about blockchain technology. However, the nation is discouraging cryptocurrencies by imposing a high tax on them. Bloomberg reports that the Indian cabinet will probably meet the next week to discuss levying an extra 28% tax on top of the existing 30% cryptocurrency tax.