Having completed its pilot project on blockchain technology, Maharashtra has joined the bandwagon of Telangana, Andhra Pradesh, Kerala and other states that are actively working towards adopting blockchain for egovernance.
The second most populous state in the country has already made some budgetary allocation for the blockchain adoption and is looking to use the technology in agriculture marketing, supply chain, registration of vehicles and document management system and later for every department.
In blockchain this week, let’s take a look at some of the latest blockchain-related developments!
Maharashtra To Adopt Blockchain For Egovernance
The Maharashtra state government has approved blockchain adoption in agriculture marketing, supply chain streamlining, registration of vehicles and document management system and has allocated INR 10 Cr for the project till 2019-2020.
The Maharashtra information technology directorate has been tasked for the implementation of the project. Speaking to DNA, state information technology department principal secretary SVR Srinivas said, “Already the government has completed its first blockchain pilot in the fields of health, supply chain, documents and SSC certificates. A detailed report has been prepared to go in for extensive use of blockchain technology in various government departments. A regulatory sandbox, which will be a common framework for adopting blockchain technology, will be prepared in the next five to six months.”
Blockchain Could Help Meet SME Funding Needs: Asian Development Bank Report
The latest report ‘Fintech For SMEs’ published by Asian Development Bank delves into the applications of, and importance of blockchain in meeting SMEs and startups’ funding requirements.
The report observed that two obstacles limit the funding of startups are risk and rate of return. And, it further stated that the functioning of HIT (Hometown Investment Trust) funds by utilising the security, transparency, auditability, and smart contract features of blockchain.
“This may expand the investor pool to individuals from local and domestic contexts, or from countries other than the one in which the project is realized. Since the spatial closeness feature of HIT funds disperses in such a setting, this global community-based approach requires another source of risk mitigation. The use of DLTs enhances trust in the proper functioning of the funds, which reduces the risk attached to an investment through a HIT fund. It therefore enables direct investments between partners who would previously not have collaborated, by bringing together individual investors from different countries to invest in specific startups in the private sector,” said the report.
On SMEs, it said that as with trade finance, technology can offer several improvements to expand the factoring market to more SMEs. The use of blockchain contracts or centralised digital platforms could standardise the format of invoices, making them easier to verify, trade, and finance. Several startups are already experimenting with the technology globally. Online retailers Alibaba and Amazon already use such data for lending activities for affiliates.
World Bank Issues $33.8 Mn Of Its Blockchain Bond
Issuing bonds using blockchain — or blockchain-operated debt instrument — is gaining traction. In India, Yes Bank used blockchain to issue INR 100 Cr Commercial Paper last month, and the World Bank has issued a second round of blockchain bond — ‘Bond-i’. With the $33.8 Mn issued in the second round, it brings the total raised to $108 Mn.
The bond has deployed a private version of Ethereum blockchain. The blockchain platform was designed and developed by the Commonwealth Bank of Australia (CBA) Innovation Lab’s Blockchain Centre of Excellence while the platform’s architecture, security and resilience was reviewed by Microsoft.
In August 2018, the CBA was mandated by the World Bank as arranger for the bond and following a two-week consultation period with the market, the two-year bond raised Au$110 Mn. In May 2019, CBA and the World Bank, with TD acting as a market maker, added additional capability to the platform by enabling secondary bond trading recorded on Blockchain making this the first bond whose issuance and trading are recorded using distributed ledger technologies, says the press announcement.
“The tap is an important milestone in demonstrating the full lifecycle management of an issuer’s capital markets needs. It is also a significant step for the platform bringing on additional participants and demonstrating the broader potential of Bond-i as a capital markets platform,” said James Wall, executive general manager, International at Commonwealth Bank.
Bond-i is part of a broader strategic focus of the World Bank to harness the potential of disruptive technologies for development to benefit the World Bank’s clients. The World Bank’s blockchain innovation lab was established in 2017 as an innovation hub for poverty reduction projects across the world and using blockchain and other disruptive technologies in areas such as land administration, supply chain management, health, education, cross-border payments, and carbon market trading.