In a sign of things to come, several State governments are in discussions with companies like Tata Consultancy Services (TCS) to set up blockchain-based infrastructure for various public projects and citizen services. The global IT services major told BusinessLine that in the next 18 months, blockchain technology will be mandated while bidding for some government projects.
According to TCS, blockchain can be used for providing decentralised and transparent population-scale services including KYC, asset registration, fund transfers, procurement, voting system, digital currencies and data security.
R Vivekanand, Vice-President and Head of TCS Financial Solutions and Global Head of TCS Quartz, told BusinessLine, “There are multiple State governments, which are trying to put a blockchain infrastructure in place. We are talking to at least three of them. We participate in some of these conversations and guiding the governments on blockchain infrastructure.” TCS Quartz has created The Smart Ledger solution that supports all the mainstream underlying blockchain technologies. The suite of solutions is a platform with foundational tools to create blockchain-based decentralised solutions. Most of the offerings under the blockchain solution have been kept open source in the Linux ecosystem.
Working with bourses
Apart from State governments, TCS is also working with more than one stock exchange. “We have completed end-to-end projects with one stock exchange. We are working with one more, and working with a depository on a project. So, that is three different projects which are going on in the market infrastructure space in India. And, I expect at least a couple of them to go live in 2022,” Vivekanand said. The company had earlier announced that they are working with The Multi Commodity Exchange India (MCX).
“I personally believe that, as we look into the future, just like securities went from paper to electronic, they will go from electronic to a tokenised form. It makes absolute sense for all the holdings that we have, all our assets to be in a secure tokenised form. For our securities, real estate holdings, shares, bonds, anything other than commodities, which we hold in a physical form like gold — there is every reason to do that. That way, the liquidity will improve and the security will improve and smart contracts will also probably lead to easier estate management, and even handling of insurance.”
Supporting financial services
Globally, the company has seen good traction in Switzerland for crypto-assets and investments, while more conversations around the technology is on. “We have projects in Singapore, the UAE, Israel. There is an enabling ecosystem to do projects in those countries,” Vivekanand said.
In Israel, TCS is working with the largest bank to come up with new solutions in a greenfield project, helping them put all bank guarantees on the blockchain.
In India, apart from several banks and financial institutions, through Quartz for Markets, TCS has been working with more than one stock exchange. The company had earlier announced that they are working with The Multi Commodity Exchange India (MCX), the country’s largest commodities exchange.
“They (other players in the financial sector) are waiting for the regulatory approval for coming out. You will hear about it very soon. But we are working with three of these institutions on distinct projects which leverage blockchain. So that is where I think, Quartz for markets is also very relevant …when it comes to how you can create a new type of marketplace,” he said.
Blockchain for CBDC
While the Reserve Bank of India (RBI) is exploring the use case of blockchain as the underlying technology for proposed Central Bank Digital Currency (CBDC), industry experts have been claiming that it will be difficult for the existing blockchain infrastructure to process the huge volumes of transactions at once countries like India would likely see.
Vivekanand, however, feels that blockchain technology has been advancing faster than ever. “In my experience, the performance characteristics of underlying blockchain technologies have improved manifold in these last three years; manifold and not by 10 or 20 per cent but by many times. That’s the kind of research that is going into it which is also why a platform like Quartz is very powerful…,” he said.
Betting on blockchain
In the next three to five years, he believes blockchain will take off in a big way. “When somebody like TCS does these projects it comes with a proper business case, and returns on investment, you have to get the efficiency. People are doing serious projects which us right. All of these institutions are significant players in their industry. We have got 3 or 4 prospect customers who are start-ups working with us, but the other 80-90 per cent firms are all very mature organisations. So, in that sense I think the potential is very high. It will grow in a pragmatic manner and I think CBDCs will grow in a big way in the next 3-5 years. Tokenised securities in my view will be a reality in most countries. I would even take a bet to say that in 20 years all securities will be tokenised,” he added.