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Reserve Bank of India launches blockchain trade financing project

Monday 27 June 2022 13:16 CET | News

The Reserve Bank of India (RBI) has launched a blockchain-based trade financing pilot project.

The project is launched in collaboration with lenders including HDFC bank, ICICI Bank and State Bank of India, among several others. Belgium-based SettleMint, US-based Corda Technologies and IBM are providing technology support for the project driven by the central bank’s Innovation Hub in Bangalore. 

The central bank’s project hopes to integrate blockchain technology into the core banking system to prevent letters of credit fraud. Letters of credits serve as financial contracts between a bank and a beneficiary that guarantees transactions are made when agreed conditions are met. 

The pilot project, called ‘proof of concept’ in industry parlance, has begun with banks to run blockchain-backed systems to issue digital letters of credit. Blockchain’s immutability could be used to mitigate tampering of documents recorded on the digital ledger.

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Keywords: central bank, blockchain, regulatory sandbox, trade finance
Categories: DeFi & Crypto & Web3
Companies: RBI
Countries: India
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DeFi & Crypto & Web3

RBI

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