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.
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.