As of 31 January, Yes Bank has officially deployed a blockchain solution commercially. This comes a whole year after it became one of the first banks in India to use Hyperledger, an open source framework hosted by The Linux Foundation to build a custom application for its client Bajaj Electricals—an experiment with distributed ledger technology (DLT) where the bank had digitised financing for Bajaj Electricals and its suppliers.
This is the first commercial deployment of an enterprise blockchain solution in India. Second in the world.
“Last year, we had conducted this on Hyperledger 0.6 which was not commercially ready and supported by IBM and they wanted us to wait till Hyperledger 1.0 goes live,” Anup Purohit, senior president and CIO at Yes Bank, tells The Ken. Which it did, in March 2017.
Yes Bank took this up as an R&D project with Bajaj Electricals and, well, got lucky. IIT graduates awaiting new jobs were asked to work with fintech startup Cateina Technologies to develop smart contracts, Purohit says.
With an enterprise-ready blockchain, Purohit decided to migrate to Hyperledger 1.0. Yes Bank now plans to add 35 vendors of Bajaj Electricals onto this platform to transact on both sides—dealer finance and vendor finance.
But Yes Bank isn’t alone.
This month, New York-based enterprise blockchain solutions company MonetaGo is also deploying a custom service for fraud mitigation for Indian companies. Notably, MonetaGo also helped the Institute for Development and Research in Banking Technology (IDRBT) in Hyderabad with the January 2017 white paper on blockchain applications.
Their first blockchain application for trade receivables discounting will have MonetaGo working with TReDS (Trade Receivables Discounting System) exchanges on fraud mitigation solutions as well as a mechanism to authenticate invoices, says Jesse Chenard, CEO of MonetaGo. This is a tokenless blockchain built using Hyperledger Fabric 1.0 and will launch most likely by next week, he confirms.
These two projects are just the beginning, there are more commercial deployments in India in the near future.
Businessmen, technocrats and governments around the world have a very clear stance on cryptocurrencies. Blockchain good, Bitcoin bad. Even Finance Minister Arun Jaitley suggested so during his Union Budget speech last week.
This optimism isn’t surprising. Enterprises around the world are jumping onto the blockchain hype train because of the colloquial FOMO (the fear of missing out). But until now, there was no shift from experimentation to production, apart from the one exception—Northern Trust, a Chicago-based administrator of funds, launched the first commercial deployment of DLT for the private equity market in collaboration with IBM in February 2017.
