The Securities and Exchange Board of India (SEBI) has announced that it would be introducing a new blockchain system for “Security and Covenant Monitoring” of financial instruments in the country. The announcement was made on Wednesday in a press release explaining that the system would use distributed ledger technology (DLT) to secure and monitor non-convertible debentures (NCDs).
The proposed blockchain is set to go live in April 2022, indicating a significant step in India’s financial blockchain use case. It would also oversee non-convertible securities and covenants’ credit ratings and give the parties involved the required permissions. The parties include credit rating agencies, debenture trustees, issuers, etc. They would have access to entities like depositories and stock exchanges and will be able to update the data.
In the press release, the SEBI explained that the blockchain would time-stamp and cryptographically sign information stored in the system. This process will give users the chance to verify the audit trail of transactions as transaction data and history will be fully encrypted. Furthermore, only the necessary stakeholders will have access to the data, which will be on a “need-to-know basis.”
Although the Indian government is still against crypto, it has not ruled against the proposed blockchain system. However, there are reports that the government intends to shut down private cryptocurrencies like Ethereum and Bitcoin.
Image Credits: Pixabay
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