The Indian government, via India’s Union Cabinet, has approved a blockchain research project by the Export-Import Bank of India (Exim Bank) with other banks around the world from Brazil, South Africa, Russia, and China.

The research project will focus on how distributed ledger technology (DLT) can be applied and how it can increase productivity.

India taking a deeper look into blockchain

The country’s Union Cabinet approved a Memorandum of Understanding (MoU) on the collaborative research of Blockchain technology. This is according to a news report by local news outlet ANI yesterday, September 12, 2018.

With Prime Minister Narendra Modi as the head, India’s Union Cabinet is the supreme decision-making body of the country with serving ministers also forming members of the cabinet.

The MoU signed by the government is a cooperative idea under the BRICS Interbank Cooperation Mechanism.

The goal of the initiative is to further understand the distributed ledger technology while looking at areas where the technology can be used to improve operational efficiency.

According to the report, the research will be carried out by the Export-Import Bank of India (Exim Bank).

Banks from other BRICS member states including BNDES, Brazil, China Development Bank (CDB), State Corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank, Russia), and DBSA, South Africa will take part in the research also.

In a statement, the cabinet explained that the blockchain technology has a huge potential to solve various challenges being faced in the financial sector space of the BRICS nations.

With the MoU, the Indian government is looking to better understand distributed ledger or via the joint research efforts.

The government will also identify areas within respective business operations where it may have the potential for applications to improve operational efficiencies.

DLT part of the fourth industrial revolution

The MoU first came into existence at the 10th International BRICS Summit in Johannesburg two months ago. The member states talked about cooperation in economic development in the face of the fourth industrial revolution.

The members agreed that the DLT is something they need to understand better if they are to be a part of the development of the digital economy.

Mikhail Poluboyarinov, First Deputy Chairman and a Member of the Board stated that the MoU allows development banks of the BRICS countries to study the applications of the technology in infrastructure finance and bank products optimization.

Reserve Bank of India is reviewing its cryptocurrency ban

Earlier this year, the Reserve Bank of India, the country’s apex bank banned cryptocurrency trading in the country. However, all indications point to the bank reversing its decision in the near future.

In its annual report a few weeks ago, the bank expressed fears that crypto was being pushed into the shadows, where authorities would struggle to keep track of digital trade.

The bank is expected to reverse its ban on cryptocurrency trading and instead focus on tracking digital trades in the country. The bank reiterated that developments on digital assets need to be closely monitored.

By all indications the government believes regulating the cryptocurrency industry in the country is better than an outright ban of trading.