Cryptocurrencies may use blockchain, but there is a far wider use of the technology. The government-promoted Centre for Excellence in Blockchain Technology, under the Ministry of Electronics and Information Technology, aims to harness the tech for our daily use.
India and the fintech industry are not alien to blockchain technology, which has become a huge talking point among startups, media and even in government corridors. And not without reason, blockchain is a platform that allows the recording of information in an extremely secure way, making it near-impossible to alter or break into the system. Blockchain has been described as a digital ledger of records called blocks, which are used to record transactions and track assets in a business network. It is known to democratise processes, ensuring security, transparency, and efficiency, with one of the most attractive qualities of this technology being decentralised ownership.
Blockchain is a distributed ledger management technology that can be used for transactions between two people or to track custody of couriers, etc. Since transactions are recorded in almost real-time.
Further, there is a reliable record of each transaction, eliminating the prospect of altering past transactions. In essence, blockchain technology has the potential to make each and every transaction entirely fool-proof.
Blockchain: moving beyond cryptocurrencies
There is such a steep learning curve with this emerging tech that the government has set up a Centre for Excellence in Blockchain Technology, under the Ministry of Electronics and Information Technology. It’s an interesting avenue where the government is using blockchain technology in the Digidhan portal, which has been created for the “accurate reporting, monitoring and analysis of all types of digital payments transactions” that occur in India. This is proof that the government is embracing innovation, unafraid to explore, and is giving a platform to the latest technologies.
In its report titled ‘Time for trust: How blockchain will transform business and the economy’, PricewaterhouseCoopers (PwC), one of the Big Four accounting firms, has predicted that “blockchain technology will enhance around 40 million jobs globally, and add $1.76 trillion to the global economy by 2030”. It’s safe to assume that there is immense potential in embracing blockchain, particularly if you’re working in the fintech space, where each and every transaction merits absolute privacy and absolute safety. In fact, the PwC report also states that in India, the maximum use of blockchain is for funds transfer, digital identity, and payments infrastructure, each of which has been the focus of several banking and financial institutions, including fintech companies.
India currently has over 500 blockchains in financial services startups. Web 3.0, which Indians are slowly warming up to, can end up changing the domain entirely. And because Web 3.0 will rely on blockchain, making the banking system more centralised, it won’t be all that easy to break into it. Blockchain will be able to reduce the risk of fraud in financial transactions, granting a higher sense of security to individuals.
Each person has diverse financial needs. With personalised, customised digital journeys, blockchain makes the entire ecosystem of digital lending, peer-to-peer lending accessible, reliable, and transparent for the individual user. The potential of blockchain technology lies also in how it can continue to evolve, giving scores of engineers something new to unlock, something different to be surprised by, and learning better methods of optimising fintech infrastructure.
The future of blockchain
The Indian government has always encouraged startups, attempting to give each industry a level playing field. On the international stage, Prime Minister has acknowledged the contribution of startups to India’s economy and has encouraged investors to consider investing in India’s potential, and we even have a National Startup Day. As long as there is government regulation and rules specific to the industry one is looking to bring into the blockchain ecosystem, this technology has a promising future in India.