The narrative of “blockchain, not Bitcoin‘ across the world is slowly reversing. But not in India. The country’s regulatory entity, Securities and Exchange Board [SEBI] has once again restated its interest in distributed ledger technology for the purpose of monitoring and recording financial instruments.
According to a recently released circular, SEBI revealed its intentions to launch a system for “security and covenant monitoring” for non-convertible debentures [NCDs] beginning April 1, 2022. The entity’s decision to adopt blockchain technology signifies yet another important breakthrough for the emerging technology with respect to adoption within the financial system in India. SEBI also said that the integration of distributed ledger technology [DLT] into the country’s financial instruments is likely to enhance system efficiency multifold.
The market regulatory in a statement also stated that blockchain technology offers better protection against different types of cyberattacks because of its distributed nature, which removes the single point of attack possibility.
The document read,
“The system using Distributed Ledger Technology [DLT] shall be used for recording of the process of creation and monitoring of security [viz. due diligence, charge creation etc.], continuous monitoring of covenants by Debenture Trustees [as applicable], credit rating of the non-convertible securities by the Credit Rating Agencies, etc.”
India’s lagging blockchain ecosystem
India is one of the fastest-growing nations in the world and even plans to have its own space station someday. But when it comes to technological advancement and financial inclusivity, the country has struggled to come up with a solution. According to the World Economic Forum [WEF], over 10% of global GDP could be stored on blockchain systems by the year 2025. And yet, a country where the government has embraced the technology, India is far behind the US, China, Australia, and Japan.
According to reports, blockchain technology is one of the most sought-after skill sets in India. But the lack of manpower with a relevant skill set has led to a magnificent salary boom. Despite India’s young demography, the country has been quite late in the game.