Cryptocurrency assets have been gaining rapid popularity in India, and come under heavy scrutiny by the Indian government this year. From repeated statements from the Finance Minister that cryptocurrencies are not valid tender, to the prohibition of debit and credit card usage in cryptocurrency purchases this month, the Reserve Bank of India has been determined to curb debt-fuelled crypto purchases across India’s 15 cryptocurrency exchanges.
However, if it were not for darker limitations of cryptos that get tagged along, there is no doubt of the realistic potential for cryptocurrencies and blockchain technologies to replace traditional banking architecture. Especially when India’s banking sector is labour intensive, the question will be whether banks are adequately equipped to pivot their operations and are willing to equip workers with new roles in line with its blockchain-related business operations.
State Bank of India: Blockchain to replace traditional banking services by 2030
The State Bank of India (SBI), a renowned state-owned lender, is one of the players exploring possibilities for integrating blockchain technologies into its business operations, without impacting the employment market. The bank is actually hopeful about the potential for emerging blockchain technologies to create exponential employment opportunities in the banking segment. SBI’s Head of Innovation recently revealed that:
By 2030, traditional banking services could cease to exist with Blockchain. All services of banks can be replaced by Blockchain
He added that the SBI was forming a BankChain, uniting leading banks of the India including SBI, ICICI Bank and DCB Bank, to brainstorm the potential uses of emerging blockchain technology to provide affordable and efficient banking solutions to clients.
ClearChain: the push for Blockchain adoption in Indian banks
Bankchain’s first project, named Clear-Chain(c2), has already seen the blockchain platform being put to use for integrating and sharing valuable data such as:
KYC (Know Your Client)
AML (Anti-Money Laundering)
CFT (Countering the Financing of Terrorism)
Suspicious transaction reports
Cross-border wire transfer reports among participating banks
Clear-chain is being tested by member banks, with four other banks expected to join the Indian banking consortium in the next 4 months.
Support for Blockchain, not Cryptocurrencies
Nonetheless, Sudin asserts the SBI remains opposed to cryptocurrencies, but that customers ultimately have the freedom to decide where to invest, and the State Bank would not stop them.
They can store their wealth in a bank account, or they can store it in a Bitcoin. However, they have to figure it out with the potential risks involved with Bitcoins. We don’t stop them, in fact, we ensure we explain the risks to them as our responsibility. However, we don’t recommend Bitcoin.
He further emphasizes the importance of trust, and how it is always a bank’s top priority. Sudin thinks customers would have to wait and trust the banks adopting Blockchain as a technology, but not the crypto-aspect of it.
We have to abide by the regulations of the government for they hold the authority. We continue our association with fiat currency, and it is not going to end anytime soon.
The magnitude of Blockchain is so great that I can create an entire financial stack in few days. Blockchain can simply make things easier by manyfold.
What are your thoughts on how Blockchain technologies may transform traditional banking jobs? How do you think we can best equip ourselves and future generations with the adequate skillset to thrive in a blockchain-enabled future? Please let us know below!