Blockchain technology is currently in the stage of evolution, serving as the backbone of decentralised and digital currencies. While its initial uses were mainly in cryptocurrencies, the technology is evolving to find new applications in various sectors in India. This is on account of its decentralised nature, ensuring complete transparency, which is crucial for safeguarding digital assets and data.
The adoption of blockchain technology is still in its early stages in India, but it is rapidly gaining momentum. The Indian government is actively supporting the adoption of blockchain technology through policies, regulatory frameworks, and investments. The launch of the Digital Rupee is truly progressive and has the potential to revolutionise the financial industry by enhancing security and accessibility.
In addition to the government’s proactive stance, factors such as the vast tech pool and growing demand for financial services are also major contributors to the wide adoption of blockchain.
One of the most significant impacts of blockchain adoption in India is in the financial sector. The development of digital currencies and blockchain-based payment systems is transforming traditional banking. Soon, seamless and cost-effective global transactions and cross-border payments will become possible, lowering operational costs significantly.
Automation of clearing and settlement of transactions is a particularly beneficial aspect of blockchain as it eliminates the need for intermediaries to verify details or manage trustworthiness, saving time and resources while increasing efficiency. The adoption of smart contracts is streamlining business processes, reducing reliance on intermediaries, cutting costs, and expediting contract execution.
According to a McKinsey study, blockchain technology could reduce the operational cost of international transactions from $26 to $15 and lower the annual operational costs for companies by an average of $15 billion. These cost savings can have a huge impact on the Indian economy.
That said, blockchain is now a vital pillar of the modern Indian economy, offering solutions that extend beyond financial sectors. Indian industries are utilising blockchain’s potential in diverse areas such as supply chain management, healthcare, and more, indicating a broad spectrum of possibilities for this technology as it reshapes traditional practices across the country.
In healthcare, blockchain provides secure and interoperable management of health data, facilitates drug traceability, and enhances patient care. In supply chain management, it enhances transparency and traceability in supply chains, reducing fraud and ensuring product authenticity. According to a PwC study, blockchain could reduce supply chain costs by up to 30%, benefiting various industries involved in the supply chain ecosystem.
Blockchain technology is also making a significant impact on various other industries. For instance, the nation’s largest bank, State Bank of India, is using blockchain to streamline trade finance operations, which not only enhances operational efficiency but also reduces the risk of fraud.
Blockchain also has the potential to improve the efficiency of government services, reduce corruption, and promote transparency. The Indian government’s use of blockchain to develop a digital identity system is another example of how it can revolutionise the public sector. This system offers citizens a secure and verifiable way to identify themselves online, increasing transparency and security in government services.
Overall, blockchain technology has the potential to improve the efficiency, transparency, and security of a wide range of industries in India.
These are just a few examples of how blockchain technology is being used in the Indian industry. As the technology continues to develop, we can expect to see even more innovative and transformative applications in the future. Blockchain may hold the key to unlocking the full potential of the Metaverse and Web 3.0 due to its unique features.
Indian startups are not far behind in embracing blockchain technology, developing innovative financial products and services like blockchain-based lending and insurance platforms, and contributing to financial inclusion and expanding access to banking services.
Indian entities are actively engaging in global collaborations for blockchain research and development, reflecting India’s commitment to staying at the forefront of global blockchain innovation.
However, the widespread adoption of blockchain technology in India is not without its challenges and concerns. Regulatory uncertainties, interoperability issues, and cybersecurity threats must be addressed to ensure a smooth transition to this technology.
As it continues to evolve, blockchain technology’s transformative potential in the Indian economy will only become more evident, making it an exciting journey toward digital excellence.
Article written by: Mr. Bharat Patel, Chairman & Director, Yudiz Solutions Limited
