While India is still far from being liberal and poised towards its perspective for cryptocurrencies and even as the country’s central bank, the Reserve Bank of India (RBI), had already banned banks to serve trading related to cryptocurrencies, few leading banks and top notch companies of the country have integrated cryptos and distributed ledger technology (DLT) into their operations, using the nascent technologies to pay vendors, suppliers and as a transparent treasury management tool, reported Economic Times on January 5, 2018.
Citing people with direct knowledge of the matter, the report said, “Even as bitcoin loses sheen, some companies and banks are looking to use digital currency for their internal operations based on blockchain technology.”
Despite the blanket ban on bitcoin and other digital curencies, forward-thinking corporate organizations, banks, and financial institutions in India are seriously experimenting with cryptocurrencies and its underlying blockchain technology.
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In order to revolutionize their businesses, these organizations have started experimenting with the underlying innovative technology of cryptocurrencies to find out how it could help them.
According to the report, top Indian firms including Hindustan Unilever Ltd (HUL), Mukesh Ambani-led Reliance Industries Ltd (RIL), HDFC Bank and ABG Shipyard and few others, have launched crypto and blockchain-based pilots for internal treasury management, record keeping, payments, trade and finance functions and more.
Used only for internal operations, these in-house made crypto assets are effective as a working capital management tool, where rather than actually transferring money, cryptocurrency will be transferred and accounts shall be reconciled at a later date.
The in-house cryptocurrencies will not break any regulatory norms of India as its not for speculative purpose, which means — trading these cryptocurrencies DOES NOT involve high risk, in expectation of significant returns.
Currently in pilot project phase, the use of crypto-assets by these companies and banks will be extended if become successful. The firms have not yet set a definite timeline for scaling up usage.
Recently, a committee on cryptocurrencies formed by the central government of India is likely to recommend lifting the ban on cryptocurrencies and legalize it. THe committee will submit its recommendations to the Finance ministry of India, in around February.
To recall, recently India-unit of British bank HSBC has executed India’s first financial transaction using blockchain technology for a deal involving an export by Reliance Industries to its client Tricon Energy in the US.
Reliance Industries too had recently invested $5 million for 5.56% equity stake in a London-based technology startup, VAKT Holdings Limited, which is a member of the Enterprise Ethereum Alliance (EEA) and uses blockchain technology for oil & energy trading and transactions.
In September last year, National Stock Exchange of India Ltd (NSE) had conducted tests to use blockchain for e-voting for listed companies on a platform provided by Mumbai-based blockchain startup Elemential Labs.
VIA ~ Blockchain Reporter