The Securities and Exchange Board of India (SEBI) will unveil a blockchain-based system for issuing and monitoring non-convertible debt by April 1, 2022.
SEBI
informedthat the system will store information about the terms of debt agreements, as well as track the credit ratings of organizations. The platform is designed for trustees, bond issuers and credit reporting agencies to have the ability to update data.
They will be available to stock exchanges and depositories, which will increase the transparency of all work processes. The saved data will be cryptographically signed and timestamped. The transaction history and data stored in the distributed ledger will be encrypted and will only be available to interested parties.
SEBI’s management said it is ready to follow the lead of other large institutions using distributed ledger technology (DLT) to improve the efficiency of their systems. SEBI believes this initiative will be a significant step in bringing blockchain into India’s financial ecosystem.
“DLT will provide a more robust system than traditional centralized databases. Due to its distributed nature, it will better protect data from various cyberattacks, ”the department said.
The potential of blockchain in the debt market is being explored by commercial and even central banks. Last year, the South Korean Central Bank announced that it is working to create a system for issuing bonds on the blockchain. In addition, in 2018, JPMorgan Chase, a banking holding company, together with Goldman Sachs Asset Management, also tested a platform for issuing debt obligations using the blockchain.
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