• The Indian market regulator has requested that depositories use blockchain technology

  • According to a report by Livemint, the Securities and Exchange Board of India, a market regulator, has asked depositories to use blockchain to record and monitor the creation of securities and covenants involving non-convertible securities.

    In November, SEBI formed a group to recommend ways to improve the process of creating and monitoring securities, as well as monitoring asset cover and covenants involving non-convertible securities. SEBI has asked depositories to develop a blockchain-based platform to monitor securities and covenants based on the group’s recommendations.

    The platform will go live on April 1 of next year. The system will be tested beginning in early 2022.

    The new system will be able to record non-convertible security interest and redemption payments, as well as credit rating information, and will allow for periodic monitoring of securities, covenants, and asset cover. System login credentials will be provided to all parties, including security issuers, credit rating agencies, and debenture trustees, to enable timely updates by various stakeholders.

    The SEBI announcement comes at a time when the Indian crypto community is concerned about a potential ban on all private cryptocurrencies. Although the government has stated that it does not intend to ban blockchain technology, the fate of the Indian crypto ecosystem is uncertain until crypto legislation is unveiled.

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