In a major push to cryptocurrency, SBI (State Bank of India) plans to roll out beta launches of blockchain-enabled smart contracts by next month. Blockchain-enabled KYC (Know Your Customer) will soon follow the suit.
These applications are part of BankChain, a community of 27 banks, which have joined hands to explore and build blockchain solutions for banking. Pune-based startup Primechain Technologies creates these solutions for BankChain to develop the enterprise solution that employs smart contracts to self-manage KYC protocols.
The bank was one of the founding members of the consortium called BankChain, which focuses on the research and development of Blockchain technology solutions for the banking sector. BankChain system formed in February. Further private banks viz DCB Bank, ICICI Bank and Axis Bank and five middle east based banks also participated in it.
Smart contracts are basically contracts which use blockchain, a distributed and decentralised ledger, to maintain contracts between parties. The code and agreements are public, hence traceable and irreversible and thereby do not need any enforcement agency.
On the other hand, Primechain Technologies cited some major benefits of Blockchain in the banking industry, including improved transparency, lower infrastructure cost and better transaction security.
“BankChain is a big move. It is getting all banks together and collaborating. It is also de-risking our investment in emerging tech, so that all banks can come and invest at once… we can also share knowledge and reduce the cost. We can also use each other’s technical teams to take this forward. We focused on solutions that the bank does not have… things like smart contracts, which is not regulatory heavy. We focused on those solutions,” said Sudin Baraokar, head of innovation, SBI, reported ET.
Of late, NITI Aayog officials said that the government is in the process of firming up regulations for the use of blockchain technology in the country. In order to boost ease of doing business and agriculture economy of the country, NITI Aayog is building IndiaChain, a blockchain network, which will be linked to IndiaStack, a set of code developed around India’s unique identity project Aadhar.