A month after the Indian Ministry of Electronics and Information Technology (MeitY) released a national strategy on blockchain for adopting the technology in government systems, India’s third-largest private bank, Axis Bank has successfully executed the industry-first blockchain-enabled Domestic Trade Transaction.
The transaction was executed on Secured Logistics Document Exchange (SLDE), a Government of India (GOI) backed platform by Axis Bank with ArcelorMittal Nippon Steel India (AM/NS India), and Lalit Pipes & Pipes Ltd. (LPPL).
It was reported in the media that the ministry has adopted a multi-institutional approach for the national blockchain framework, which includes C-DAC for research and development of the framework, NIC, and NICSI for hosting the national-level blockchain infrastructure and offering blockchain as a service.
Documents such as invoices & transport bills were presented in digital form along with letters of credit advice.
In a statement, the bank said that the government’s platform provides a seamless experience to all participants involved in the trade transaction, giving them visibility of the transaction and documents, thus resulting in better management of working capital requirements.
Execution of transactions on the SLDE platform addresses all historic issues with paper-based trade transactions such as limited transparency, slow speed of transfer of physical documents, and lack of audit log, the bank statement stressed.
Commenting on this, Axis Bank President & Head – Wholesale Banking Products Vivek Gupta said, the bank continues to lead the industry in adoption of blockchain technology by working along with various partners & developing the ecosystem.
On the other hand, ArcelorMittal Nippon Steel India Deputy Chief Financial Officer Amit Harlalka said that the company is always looking to improve its process of the supply chain that involves various stakeholders from vendors, customers, and bankers. This transaction with Axis Bank is a step in this direction.
The generation and storage of logistics documents through the SLDE platform going forward will bring efficiency, assist audit trail and leave a greener transaction imprint, Harlalka adds.
By using SLDE, we look forward to reducing our carbon footprint while enabling greater transparency, visibility, and sustainability towards our various internal and external stakeholders, Zoher Diler, Jt. MD & CFO, Lalit Pipes & Pipes said.
The government has been very proactive in adopting blockchain technology without cryptocurrency. This might not be the first time this is happening.
Various state governments have already adopted blockchain technology for governance purposes. Many states, like Tamil Nadu, Telangana have also released policies on blockchain adoption. Some have used it for education, land registry, logistics, and other use cases.
In Maharashtra, after opening local trains in Mumbai city, citizens completing second doses were given universal passes that were based on blockchain technology.
However, due to the decentralized aspect of cryptocurrency based on blockchain technology, the government is concerned that cryptocurrencies can become an alternative to fiat and this could harm the economy.
Not only that, but cryptocurrencies can also excel in illegal activities and can become an avenue for drug cartels, terrorism, and activities that can hamper society at large.
As many states want to scale their adoption to supply chain, electronic voting and other use cases, this development will definitely help the blockchain sector that has been trying hard to become a mainstream industry, just like the IT sector.
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