On 12 August the Union Cabinet, chaired by the Prime Minister Narendra Modi, approved a Memorandum of Understanding (MoU) on collaborative research on distributed ledger and blockchain technology.
A press statement released by the Government said that the move is in context to the development of the country’s digital economy by the Export-Import Bank of India (Exim Bank).
The approval is ex-post facto, which implies that the Exim Bank has already inked a MoU under the BRICS (Brazil, Russia, India, China and South Africa) Interbank Cooperation Mechanism.
According to its website, the Export-Import Bank of India is the premier export finance institution of the country. It aims to build value by integrating foreign trade and investment with the economic rise of India. The Bank has been guided by expertise at the Board level, by senior policy makers, expert bankers, leading players in industry and international trade as well as professionals in exports, imports or financing.
Several other participating member banks are also involved under the BRICS Interbank Cooperation Mechanism, including the Banco Nacional de Desenvolvimento Economico e Social (BNDES, of Brazil), the China Development Bank (CDB), the State Corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank, of Russia) and the Development Bank of Southern Africa (DBSA).
The BRICS Interbank Cooperation Facility (MMC BRICS) was established in 2010 as a result of the signing of the MoU on Cooperation between the State Financial Institutions of Development and the Export Support of BRICS Countries in Brasilia.
The framework of the MoU was originally proposed at the 10th International BRICS Summit held in Johannesburg in July. The primary focus was cooperation in economic development in the face of the fourth industrial revolution. The banks agreed to jointly study DLT (distributed ledger technology) in the interests of the development of their digital economies.
The press release said that the distributed ledger or blockchain technology has the potential to create effective solutions to solve a number of financial problems that BRICS nations’ face.
The MoU intends to enhance the understanding of how distributed ledger or blockchain technology can work. The release said that the countries aim to do this through joint research efforts to identify areas within respective business operations where it may have the potential for applications aimed at enhancing operational efficiencies.
During the 9th BRICS Summit held last year in China, the nations adopted the Xiamen Declaration. In the declaration, the members said that they welcome a BRICS STI (science, technology and innovation) Cooperation MoU. They support enhanced cooperation on innovation and entrepreneurship, including by promoting technology transfer and application, and cooperation among science and technology parks. The nations also offer aid to enterprises as well as mobility of researchers, entrepreneurs, professionals and students.
According to the release, the declaration highlighted the importance of the digital economy and how the BRICS nations could leverage the thriving and dynamic digital economy to foster global economic development.
Falling in line with India’s aim to develop its digital economy, in July, the Indian state of Telangana also signed MoUs with blockchain companies to implement the technology in state applications and government services. The measure intends to bring more transparency and efficiency to public services provided by the state.