In a conversation with BloombergQuint, Jesse Chenard, chief executive officer of MonetaGo said that there are multiple uses of blockchain beyond virtual currencies and that is what the company is focusing on in India. It is in talks with the RBI on the deployment of certain solutions, while also working with commercial banks to help run pilot projects based on the technology.
The idea, said Chenard, is to get Indian banks to adopt blockchain by integrating it in their existing processes such as payments, remittances and trade-finance settlement. One example of this is the setting up of a State Bank of India led consortium which is looking for ways to use blockchain technology to prevent frauds in the system by sharing a negative list of defaulters among participant banks.
While some are of the view that blockchain solutions aren’t viable for a heavily regulated and centralised industry like banking, Chenard said that banks just need to work together to set up resilient systems which cut down points of failure.
Chenard added that the company showed ‘proof of concept’ for trade finance and trans-information payment systems during the IDBRT trial. The company has come up with more than 100 possible use cases for banks, explained Chenard in the conversation below.
Indeed, blockchain based solutions are starting to gain currency among Indian banks. In October last year, private sector lender ICICI Bank executed India’s first banking transaction using blockchain on a pilot basis. These transactions were carried out for trade finance and remitting money. Others like Yes Bank and Axis Bank are also experimenting with blockchain technologies but a commercially viable solution is yet to emerge.
According to the Chenard, one strong use case of blockchain is integrating it with payment and remittance systems. India has a number of well established payment networks like Immediate Payment Settlement System (IMPS) and Real Time Gross Settlement (RTGS). MonetaGo argues that these systems can be made more secure and efficient through the use of blockchain technology.
“We don’t need to provide a new payment system. We need to integrate with it. We need to ensure that settlement agents are represented on the blockchain and have authority over any application that touches the payment. But the settlement still happens at the bank and the report comes from the National Payments Corporation of India.”
Jesse Chenard, CEO, MonetaGo