India is known for its quick adoption of digital technologies and innovations, and blockchain is no exception. Blockchain technology is regarded as revolutionary in the fields of finance, healthcare and the public sector. It is poised to play a significant role in the Indian landscape. In this blog, we will discuss the future of blockchain in India and the challenges it faces.
A Brief Overview of Blockchain
Blockchain, launched in the year 2009, refers to a decentralized ledger. People often associate it with cryptocurrency such as Bitcoin. However, it has proven its significance in various other fields, finance being the frontrunner.
Data is stored in ‘blocks’ in a blockchain via cryptography. Every single piece of information or asset can be stored in it. No single organization or person has power over the network. Rather, a peer-to-peer network is followed, allowing public verification of data.
Blockchain is widely known for its immutable nature. Once data is entered into a blockchain, it cannot be changed. This data forms a chain chronologically, ensuring accurate storage and utilization. The future scope of blockchain technology looks promising and India too is catching up to the ground-breaking technology.
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Indian Approach Towards Blockchain
India has been proactive in exploring the possibilities of this technology. The Indian blockchain technology market is the fastest growing in the Asia-Pacific region. With a projected CAGR of 91.1% from 2023 to 2030, the future of blockchain in India looks promising. Let’s look at the various government and private efforts towards implementing blockchain in India.
Government Approach Towards Blockchain
The Indian government has taken several steps to assess and implement this groundbreaking technology on a national level. Let us take a look at them:
National Blockchain Strategy
The strategy launched by the Ministry of Electronics and Information Technology (MeitY), aims to incorporate blockchain technologies in e-governance. Their mission is to create trusted digital platforms using shared blockchain networks, facilitating innovation, technology and secure digital service delivery to the country's citizens and businesses.
Digital Rupee
Although the Reserve Bank of India (RBI) has been hostile towards cryptocurrency and blockchain in the past, its stance towards it has shifted to a more positive outlook. With the Central Bank Digital Currency (CBDC), the future of blockchain in the financial sector looks promising. Pilot projects for the digital rupee are already underway and it is set to launch in the near future.
Blockchain as a Service (BaaS)
It functions similarly to the Software as a Service model. It allows users to create, operate and host their own blockchain apps. India plans to leverage BaaS in government departments and make processes streamlined. The National Informatics Centre (NIC) will handle the research and development and backend of this project.
Private Sector Approach Towards Blockchain
Several private companies, apart from the Indian government have taken great initiatives to implement blockchain technologies.
Financial Institutions
Banks such as ICICI and Axis banks have incorporated blockchain to streamline and secure their operations.
Supply Chain
Tech Giants like Tata Consultancy Services (TCS) and Mahindra Group are already developing ways to implement blockchain into their supply chain and logistics.
The Startup Ecosystem
India's startup ecosystem is bustling with innovation. Companies like Polygon made global news for providing blockchain scalability solutions.
Challenges of Adopting Blockchain in India
While the future of blockchain poses great opportunities, India faces significant challenges. As blockchain is still in its infancy, there is little trust in the technology. Therefore, predicting its implications on a national scale is difficult. India, however, initiated several strategies to research and implement the technology.
Another challenge that blockchain technology faces in India is the lack of regulation. Companies are scared to implement the technology since there is no proper regulation or law governing blockchain. Moreover, there is a lack of skills and knowledge in the field making their adoption daunting.
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Key Areas of Blockchain Implementation
India will benefit immensely from blockchain implementation in various sectors. The change will drive the nation to become the global leader in technology and innovation. Let’s look at the key industries:
Finance
India has significantly increased the financial inclusion of its citizens through the Unified Payments Interface (UPI). Blockchain could further transform the digital landscape by enabling microtransactions and peer-to-peer financial services, reaching underserved people.
Public Services
The future of blockchain in public service is promising. Several states have already started to experiment with blockchain. It can aid in land registry, identity management and other services.
Supply Chain
India boasts a wide and extensive network of supply chains and logistics especially in the agriculture sector. With blockchain, farmers, retailers and consumers can have access to a transparent network. This would enable accurate tracking of produce and thus reduce costs.
Healthcare
The Pharmaceutical industry can battle counterfeit drug production through blockchain. Additionally, regulatory compliance will also improve. Plus, drug import and export can be traced accurately.
Final Words
All in all, the future of blockchain paves a path full of innovation. With government initiatives and private ventures, the future scope of blockchain is interesting. Ready to make an impact in the growing Blockchain market in India? Enroll in the MCA program by Amity Online University and secure the opportunities offered by blockchain in India.
