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NSE looking at blockchain for ensuring settlement guarantees

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India’s leading stock exchange, the National Stock Exchange of India (NSE) is experimenting with blockchain technologies, and has already initiated a couple of pilots. At the recent ‘FIX India Conference’, Sankarson Banerjee, CTO Projects, National Stock Exchange of India, shared some details on how the exchange was looking at leveraging blockchain technologies. “We see value of blockchain down the chain in post-trading settlement and in other things like CKYC services, trading voice exchanges, invoices. Those are digital assets where blockchain is a good way of supporting our business. It is also leveraged in Over the Counter Products where speed is not an issue. These are the areas where global stock exchanges have been experimenting with blockchains.”

Banerjee emphasized that the exchange was not interested in the currency aspect of blockchain, but rather in usability, transferability aspect and in lowering the cost of operations like reconciliation, checking, making sure that the asset is correctly transferred and is not re-used.

NSE is positive about using blockchain in settlements, and sees it as a potential use case for blockchain. As a service, NSE provides a settlement guarantee from broker defaults. NSE provides the guarantee in the middle and makes sure that the exchange happens and the other party does not default.

To understand the maturity of blockchain talent in India and to encourage development, NSE also recently organized a blockchain focused hackathon with the objective of tackling real world problems in the financial markets using blockchain technology. “For any new technology, there is never sufficient talent available. It has to be developed. We ran a hackathon recently and we almost got twice the number of teams than expected. We saw a considerable amount of understanding at a junior level who knew blockchain and how to use it. However, in blockchain as a technology the toolkits and stacks have matured to the point where there is not much need to understand how it works in detail. One needs to understand how to use the toolkit, which makes it a lot easier. I have seen at least 100 start-ups in India that have done various things at various levels on blockchain,” said Banerjee.

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