The National Securities Depository (NSDL), India’s central securities depository based in Mumbai, launched blockchain-based security and covenant monitoring platform.
NSDL officially launched the distributed ledger technology (DLT) platform on Saturday, May 7, during its 25th anniversary presentation, alongside the Securities and Exchange Board of India (SEBI). The platform is expected to strengthen the monitoring of security and governance in the corporate bonds market to bring “further discipline and transparency to the market.”
SEBI Chairperson Madhabi Puri Buch underscored the blockchain’s transparency as the key reason for the technology’s popularity but made a reservation regarding its current cost-effectiveness and remarked that the anonymity feature remains highly unwelcomed by Indian authorities:
“This is the single biggest differentiator between private DLT manifestations and what we commonly refer to as Central Bank Digital Currencies where it is not envisaged that this aspect of the technology would be put to use as we don’t wish to have anonymity.”
The network will be maintained by two nodes, whom the NSDL and the Central Depository Services Ltd. (CDSL), a SEBA division, will control. As Buch specified, other entities will have a chance to join the network and establish their nodes in the future.
Related: Brain drain: India’s crypto tax forces budding crypto projects to move
NSDL, India’s oldest depository, controls 89% of the country’s securities market. Now all its data, previously stored in centralized databases, will be cryptographically signed, time-stamped and added to the ledger.
On April 28, the Indian Ministry of Electronics and Information Technology issued a directive, requiring crypto exchanges, virtual private network (VPN) providers and data centers to store a wide range of user data for up to five years. At the same time, trading volume on top Indian crypto exchanges has declined by 70% in the aftermath of the new 30% crypto tax rule that came into effect on April 1.
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Author: David Attlee