The Indian Central Bank, RBI, has discouraged its customers to use cryptocurrency for transactions and has also issued a circular to other banking institutions in the country to follow suit. However, many of the big banking corporations and conglomerates are exploring the idea of trading in cryptocurrency or atleast to adopt its basic underlying technology – blockchain.
Anonymous sources have reported that Hindustan Unilever, Reliance Industries, HDFC Bank, and ABG Shipyard are among the conglomerate giants looking into blockchain technology and use of cryptocurrency transactions to build a more efficient payment system.
One source was stated saying:
“The cryptocurrency would only be used by the companies and banks internally. It will mainly be effective as a working capital management tool, where rather than actually transferring money, cryptocurrency will be transferred and accounts shall be reconciled at a later date.”
As per the source, this step is being considered since transferring money between the subsidiaries of a company is very inefficient, with formalities to be completed at each end and in case of bulk payments, these can be too time consuming.
This idea, if implemented, would be much better than the current scenario since internal cryptocurrency transactions would be secure, cheaper and transparent in nature.
While HUL has reportedly told Economic Times that they will continue to develop their digital technologies, RIL, HDFC Bank, and ABG Shipyard didn’t respond to their queries. However, there is no clear indication of when these companies are going to fully integrate this technology into their companies systems.
Tech Mahindra, an Indian conglomerate, declared last month that they were going to make use of blockchain technology in order to enhance their grapes export business.
Another Indian conglomerate, Reliance Industries recently acquired a 5.56% stake in a UK based blockchain startup.
Experts are of the opinion that by incorporating cryptocurrency for internal use will give these conglomerates a free pass. They believe it would be hard to manage the fine line between following the regulations laid down by the Central Bank of India and surpassing it.
Although the RBI is fine-tuning it’s regulations in regard to cryptocurrency and it’s usage, a report has gone on to say that the Central bank does not perceive cryptocurrency as a threat.
It remains to be seen however how the RBI is going to take measures to oversee internal cryptocurrency trading within these conglomerates.