Blockchain Technology: Prospects and Challenges

[pib] Cabinet approves MoU on Collaborative Research on Distributed Ledger and Block Chain Technology under BRICS Interbank Cooperation Mechanism

Note4students

Mains Paper 3: Science & Technology | developments & their applications & effects in everyday life

From UPSC perspective, the following things are important:

Prelims level: Blockchain technology, Xiamen Declaration

Mains level: How can blockchain technology be used across various sectors


Using blockchain in the financial sector

  1. The Union Cabinet has given its ex-post facto approval for the Memorandum of Understanding (MoU) on Collaborative Research on Distributed Ledger and Blockchain Technology
  2. This is in the context of Development of digital economy by Export-Import Bank of India (Exim Bank) with the participating member banks, under the BRICS Interbank Cooperation Mechanism

What is Distributed Ledger?

  1. A distributed ledger is a database that is consensually shared and synchronized across network spread across multiple sites, institutions or geographies.
  2. It allows transactions to have public “witnesses,” thereby making a cyberattack more difficult.

Impact of MoU

  1. The MoU intends to enhance understanding of Distributed Ledger/Block Chain technology, through the joint research efforts to identify areas within respective business operations where it may have the potential for applications aimed at enhancing the operational efficiencies
  2. Distributed Ledger/Blockchain technology holds potential for solutions to various challenges being faced in the financial sector space of the BRICS nations

Xianmen declaration

  1. The Xiamen Declaration signed in China on digital economy by the BRICS leaders had highlighted the importance of the digital economy and how the BRICS nations could leverage the thriving and dynamic digital economy that will foster global economic development and benefit everyone
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