How is Blockchain Technology Transforming India's FinTech Ambition?
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The FinTech landscape in India was greeted with a watershed moment towards the end of 2016, when digital payments received an unprecedented push from the Government of India, with the sudden demonetization of high-value currency notes. In fact, the stature of digital payments rose to enjoy mainstream prominence throughout the past year as well. However, as we stepped into the New Year 2018, along with the recent unveiling of the Union Budget, blockchain technology has emerged as one of the key innovations that are going to define the future of digital financial transactions in India.
With the blockchain tech slated to transform India’s FinTech landscape, let’s understand the true revolution promised by the technology and how India is leveraging the same for achieving its FinTech ambition.
True Potential of the Blockchain Tech
A blockchain can be viewed as a digital ledger that is capable of recording any data and hence offers multiple use cases. Every block of data is recorded with hash functions and is linked together via timestamp, hence forming a blockchain. Stored anonymously, each of these blocks is shared with different stakeholders, hence eliminating the control of a single central body and the security vulnerabilities associated with the same. While each block is verified by the stakeholder, none of the individual blocks can be tampered by an external entity, hence making the entire chain extremely immutable.
In the view of the digital security issues, blockchain tech has emerged as one of the most reckoning and disruptive solution towards securing financial transactions. It is for the same reason that while announcing the Union Budget 2018, Finance Minister Arun Jaitley stressed upon exploring different applications of blockchain tech for ushering India into a digital, cyber-secured future. Ever since, FinTech companies are getting prepped up to utilize blockchain tech and diversify their portfolio and include a number of services, such as consumer lending, cross-border payments, and the delivery of insurance products.
Adoption of blockchain technology further provides plausible solutions to a number of roadblocks limiting the ubiquity of digital transactions. This includes, although is not limited to, currency reproduction and double spending. Furthermore, the deployment of blockchain tech can considerably reduce the time currently required for processing several FinTech transactions. For instance, cross-border payments, that typically consume up to 4 business days, can be done within seconds via blockchain tech. This has been made possible owing to the decentralized and security features provided by the technology. By the same token, blockchain technology has been gaining more prominence in the banking circuits. As of today, several leading banks, the likes of which includes the Axis bank, ICICI, Kotak Mahindra, and more, have been adopting blockchain tech to provide their customers with highly secured and quick banking solutions.
Several payment gateways, mobile wallets and other key stakeholders in the digital payments sector are greeted with a golden opportunity to adopt blockchain tech. As of today, the digital transactions in India are expected to grow ten times, touching the USD 500 billion mark by 2020. By adopting blockchain tech, digital payment services providers will not only be able to offer secured services, but also expedite the same.