A blockchain or the cryptocurrency technology is a new approach to accounting as well as data organization. It is making waves across the world. They have been termed by the World Economic Forum as technology pioneer. Many financial experts call it as “the next best thing after the Internet.” Moreover, it is quite relevant to applications across all kinds of digital record-keeping as well as transactions.
Many companies are exploring the technology to find out how to adopt this technology to their advantage. This could easily be the most transformative of all digital financial technology till date. It has the potential to change digital financial operations and bring about novel and sustainable opportunities through cryptocurrency.
Growth of blockchain in India
The blockchain technology is generating interest across industries in India. The technology, which is based on concepts that underlie cryptocurrency such as bitcoin, is rapidly gaining momentum in Asia’s third-largest economy. According to a Price Waterhouse Cooper (PwC) report, 32 blockchain firms were founded in India during the past year. As many as 56% of companies surveyed by the PwC say that blockchain is a part of their innovation strategy. However, there are several who are yet to implement it.
According to the PwC report, the most common uses of this technology are in digital identity, fund transfers, and payments infrastructure. Banks in India have already expressing keen interest in transactions based on it. Several mainstreams banks like ICICI Bank, Kotak Mahindra Bank, YES Bank and Axis Bank have used the tech for international trade finance and vendor financing. Typically, lenders work with startups and external firms to write a smart contract or a software code in order to execute the technology on use case basis, thus making multiple processes efficient and cost effective.
Taking blockchain tech to the next level
As this latest entrant into the fintech space grows along with its applications, industry has started customizing this technology to fit their several use cases. However, this is just the beginning. This generation of hype and interest in India needs to be built upon so that a substantial momentum pushes it to the next level. This will ensure that there are a greater number of pilots as well as production-ready applications. In all this, there is a huge role to be played by organizations of all kinds and sizes. This includes government bodies, technology giants, consultancy firms and startups operating across multiple platforms. These are indeed exciting times for the fledgling technology in the country.
“Using blockchains, an organization can remove the need for maintaining multiple local centralized databases. At the same time, blockchains can also ensure real-time as well as sequential flow of information seamlessly across an organization,” said Shashank Dixit, CEO, Deskera.
Blockchains can ensure Simplified and Transparent Processes
Blockchains can be a boon for India’s inefficient and tardy systems. They can make greater social impact if governments implement it. The transparency guaranteed can prevent abuse of power and ensure transparency in the system. Using blockchains, each and every ledger becomes accessible to the police, public, media, and the common man, making manipulation impossible. Blockchain can result in an open and global database.
Fintech for the future or innovation for the present?
The process is still underway but as the understanding of the technology increases, blockchain will enter the mainstream and can be adopted on a bigger scale. By capturing each transaction in real time, auditors can use real-time access to relevant financial information that can be retrieved in a matter of seconds. This is considerably different from the present situation where the auditor gets access to client data only at the end of a financial year. This is one of the main contributing factors that leads to delays in closing of accounts.
In fact, it is high time that governments start looking at the blockchain tech as an innovative platform to promote eGovernance.