A police officer stands guard in front of the Reserve Bank of India (RBI) head office in Mumbai April 17, 2012. The Reserve Bank of India cut interest rates on Tuesday for the first time in three years by an unexpectedly sharp 50 basis points to give a boost to flagging economic growth but warned that there is limited scope for further rate cuts. REUTERS/Vivek Prakash (INDIA - Tags: BUSINESS)
Blockchain technology has been the topic of conversation among high-ranking government officials and the heads of almost every single central bank around the globe.
In a speech given in Mumbai at the Mint Annual Banking Conclave on the theme of “Disruption, Innovation and Competition”, Subhash Sheoratan Mundra, the Deputy Governor of the Reserve Bank of India, mentioned distributed ledgers and the challenges that this new technology will impose on India’s financial system.
Mundra explains in his speech:
“For the uninitiated, ‘distributed ledger’ allows a payment system to operate in an entirely decentralized way, without intermediaries such as banks.”
The deputy governor urged the financial establishment to begin investigating distributed ledgers and blockchains, or at least seek partnerships with FinTech companies/groups that have expertise in the matter, “The banks would need to either develop own capability or seek proper alliances.” said Mundra.
Mundra, in his speech, also pointed out that US financial giants such as Goldman Sachs and JPMorgan have already established groups to deal exclusively with investigating how to apply distributed ledgers in the financial system.
He concluded by urging the Indian banking establishment to take blockchain tech very seriously and to follow the example set by Goldman and JP Morgan.
“Is it not the time for the Indian banking system to wake up to this possibility?”
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