RBI calls on banks to explore blockchain

RBI commentary : The deputy governor of the Reserve Bank of India (RBI) called on local banks to cooperate with the Institute for Research and Development of Banking Technology (IDRBT) previously established by the central bank to study blockchain projects. IDRBT is an effective way to test possible blockchain applications. The Reserve Bank of India has been studying the application of blockchain technology as early as 2014, including the issuance of its digital currency, but the issuance of digital currency will take several years to be implemented.

Translation: Nicole

One of the deputy governors of the Reserve Bank of India (RBI) has encouraged local banks to collaborate with a research institute previously established by the central bank to study blockchain projects.

In a speech at an event hosted by the Institute for Research and Development in Banking Technology (IDRBT) on July 19, Deputy Governor Rama Gandhi said that banks should develop applications for digital currencies and distributed ledgers.

The presentation focused on the broader application of banking technology, but according to Gandhi, IDRBT is an effective way to test possible applications.

Rama Gandhi

“Technologies with the potential for wider adoption include cloud-based computing, blockchain processing and virtualization of IT systems, which the bank and IDRBT could jointly study and test to identify the most suitable use cases,” he told attendees.

Gandhi had already spoken about the topic last summer, arguing that digital currencies could make money laundering easier at Indian banks. Deputy Governor Subhash Sheoratan Mundra said financial institutions should also work together to develop governance use cases.

According to reports at the time, the Reserve Bank of India had been studying the applications of blockchain technology, including the issuance of its own digital currency, as early as 2014.

Central bank governor Raghuram Rajan said institutions could issue their own digital currencies after that year, but that it would take several years for digital currencies to be issued.