India Ready To Launch Blockchain Applications in Government Banking

In the beginning of June, 2018, it was reported the India was going to ban cryptocurrency with strict and overwhelming penalty, which could include a non-bailable offense, which could lead to up to ten years in jail. Cryptocurrency exchange Zebpay, cancelled all unexecuted orders and credited customers’ wallets back in September 2018 citing the Reserve Bank of India’s (RBI) ban on domestic banks from offering financial services to crypto exchanges.

In an announcement on June 27, 2018, crypto exchange Koinex has also closed all digital assets exchange services and operations. Koinex was the first KYC compliant, multi-asset exchange and had become one of India’s largest digital assets exchange with over 40K users and trading volume around $265M.

In light of the indecision and direction of cryptocurrency, India’s banks quickly closed their accounts on crypto exchanges in light of the draft of the new law. Perhaps the hearts and minds of digital assets will be changed after the G20 Summit in Osaka, Japan, once the world’s international governments and central bank governors have an opportunity to discuss how blockchain and cryptocurrency are changing the landscape of the global economy.

In the meantime, the Institute for Development and Research in Banking Technology (IDRBT), an arm of the Reserve Bank of India has been working on a blockchain platform that will have inter-operability with banking and other financial institutions.

While India still has a negative stance on cryptocurrency because of its lack of regulation and fear of money laundering and other financial crimes, they are accelerating the research and development of blockchain technology to stay in step with global trends.

India will likely focus on how blockchain can make analytics, cyber security, and payments systems safer and more efficient than the status quo. And while the Indian government holds cryptocurrency at arm’s length, the step in the direction of building blockchain applications for their financial system suggests that a Digital Rupee might be in the works.

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