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India-based YES Bank issues CPs for Vedanta using R3's Corda blockchain platform

Loan.nattanan23/Pixabay

Fri, 12 Jul 2019, 04:41 am UTC

When it comes to the possible usage of blockchain, the issuance of corporate debt through bank transactions is just one of the more promising fields.

Recently, this was done successfully by YES Bank, an India-based private banking giant, which digital issued a commercial paper (CP) for Indian conglomerate Vedanta using blockchain technology, Money Control reports. As per the report, the blockchain-based platform used for the transaction worth $14.5 million was developed by financial technology solutions provider MonetaGo.

Usually, transactions that involve debt market issuance can take up to several days. Thanks to R3's Corda Enterprise technology that was used in the YES Bank process, the amount of time it took to finish the Vedanta transaction was drastically reduced. This is real-world proof of what blockchain can do for cumbersome and laborious processes.

The technology was used to cover only one leg of the transaction, the report said. YES Bank is not content with simply sticking with this particular transaction, either. It also wants to bring in rating agencies into the show.

The financial giant is even looking into the issuance of CPs for more corporations. YES Bank Senior Group President and Global Head Transaction Banking Group and Chief Experience Officer, Asit Oberoi said as much.

"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 CP market," he said.

Suffice it to say, this is only the beginning of blockchain’s rise in the debt issuance market, with the decentralized network potentially playing a role in every single banking process. There will be a lot more of them in the months and years to come, with even bigger financial institutions looking to make their services more appealing through decentralization.

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