The Indian federal government, not to be outdone by the various regional authorities that have begun using blockchains for administrative improvements, has given the go-ahead for the creation of a nationwide blockchain initiative.
The NITI Aayog, known as the National Institution for Transforming India, is working on a couple of proof of concept projects involving blockchain technology to address the issue of fake medicines in the country.
But that’s not all the government institution wants to do. After this pilot, and the release of a policy paper for blockchain in early July, NITI Aayog wants to launch a larger blockchain project that functions much like a “unified payments interface” that is used to transfer money from one part of the country to another seamlessly and in real time.
A source familiar with NITI Aayog spoke to Factor Daily and said that the organization seeks a way to construct an entire infrastructure dedicated to public goods. This includes land records, supply chain management, identity management, benefits, education, electrical grid improvements, and cross-border transactions.
The government wants to use the success of UPI models as the basis for its “IndiaChain” project, allowing others to piggyback on its blockchain to produce their own projects. If this bold ambition materializes, it could significantly boost the IT industry in the country, which houses several well-known startups.
The source that spoke with Factor Daily mentions the ability to build sidechains inside of the main blockchain, something that companies can do to offer their own services. In one example, credit records could be placed on a blockchain that works with IndiaChain, allowing lenders to pull up information on potential borrowers.
“Banks can use that information to give loans and track records,” the source said.
Earlier this month, 14 banks in India engaged in a consortium that would use blockchain technology to replace the paper-hungry infrastructure currently used in settlements between two different banks.
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