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Business News/ Companies / News/  Vedanta, YES Bank, MonetaGo use blockchain to digitally issue CP first time in Asia
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Vedanta, YES Bank, MonetaGo use blockchain to digitally issue CP first time in Asia

India’s highly-regulated commercial paper (CP) market involves huge amount of paperwork to be prepared by the issuer for every transaction
  • A blockchain network can either be public (permissionless) or private (permissioned), based on who is authorised to participate
  • MonetaGo moved to Corda Enterprise this February, joining R3’s growing ecosystem of over 300 diverse companies utilising Corda to build applications for a range of uses across different industries.Premium
    MonetaGo moved to Corda Enterprise this February, joining R3’s growing ecosystem of over 300 diverse companies utilising Corda to build applications for a range of uses across different industries.

    Bengaluru: Financial technology solutions provider MonetaGo said on Thursday it had digitally issued a commercial paper (CP) for the first time in Asia using blockchain technology. It had tied-up with YES Bank and issuer Vedanta, a natural resources conglomerate, for the same.

    India’s highly-regulated commercial paper (CP) market involves huge amount of paperwork to be prepared by the issuer for every transaction. The transaction was delivered using Corda Enterprise technology from R3, along with a robust set of standardized workflows to deliver a solution that will rapidly scale across markets and geographies, MonetaGo said in a statement.

    MonetaGo moved to Corda Enterprise this February, joining R3’s growing ecosystem of over 300 diverse companies utilising Corda to build applications for a range of uses across different industries.

    According to Asit Oberoi, senior group president and chief experience officer of YES Bank, "Apart from reducing operational risk and costs, this technology solution lays the foundation for a more transparent and efficient process to cater to India’s growing Commercial Paper market." G.R. Arun Kumar, Group CFO of Vedanta, noted that his company will benefit from the digitized and simplified workflow, "which shortens the laborious process running into hours to just few minutes and complete transparency that this platform offers to all stakeholders".

    Jesse Chenard, CEO of MonetaGo, believes "these (companies like YES Bank) are big corporations with the ability to move like start-ups, something very rare indeed especially when dealing with a market this size".

    It was in November 2018 that in a first for India, HSBC Holdings Plc executed a trade finance transaction using blockchain for an export by Reliance Industries Ltd (RIL) to US-based Tricon Energy. The blockchain-enabled letter of credit (LC) transaction substantially reduced the time taken for such deals (from 7-10 days to just a day), RIL had then said in a press release. The transaction allowed a digital transfer of the title of goods from the seller to the buyer. The LC was issued by ING Bank for Tricon Energy USA (importer) with HSBC India as the advising and negotiating bank for RIL.

    Reliance said at present, buyers and sellers use paper-based letter of credits to underpin transactions and physical documents are sent to each party in the transaction by post, courier or fax. While the current system provides a high level of certainty, the time and cost involved in processing the documents are deterrents for exporters.

    A blockchain network can either be public (permissionless) or private (permissioned), based on who is authorised to participate. One may liken it to the difference between an intranet and the internet. In India, though, most pilots are being done with private blockchains. Moreover, while the Indian government remains skeptical about crytocurrencies like bitcoin (and now Facebook's Libra), it is clearly bullish on blockchain as these instances will reveal.

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    ABOUT THE AUTHOR
    Leslie D'Monte
    Leslie D'Monte specialises in technology and science writing. He is passionate about digital transformation and deeptech topics including artificial intelligence (AI), big data analytics, the Internet of Things (IoT), blockchain, crypto, metaverses, quantum computing, genetics, fintech, electric vehicles, solar power and autonomous vehicles. Leslie is a Massachusetts Institute of Technology (MIT) Knight Science Journalism Fellow (2010-11), author of 'AI Rising: India's Artificial Intelligence Growth Story', co-host of the 'AI Rising' podcast, and runs the 'Tech Talk' newsletter. In his other avatar, he curates tech events and moderates panels.
    Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
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    Published: 11 Jul 2019, 03:47 PM IST
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