Indian corporates and banking giants trial cryptocurrency for internal purposes: Report

A number of major Indian corporate and banks are reportedly experimenting with cryptocurrencies to enhance their internal operations.

According to a report from The Economic Times dated January 05, Hindustan Unilever, Reliance Industries, HDFC Bank, and ABG Shipyard are working on crypto and blockchain pilots in areas such as “internal treasury management, record keeping and trade finance functions.”

A source familiar with the matter told the news outlet that the cryptocurrency would only be used internally by the companies and banks.

"It will mainly be effective as a working capital management tool, where rather than actually transferring money, cryptocurrency will be transferred and accounts shall be reconciled at a later date,” the source added.

HUL neither confirmed nor denied the report, but a company spokesperson told the ET that HUL is “constantly looking to augment digital capabilities,” adding, "We are currently working on a number of experimentation projects across our value chain which will propel us into the future and redefine the landscape in which we operate."

Big corporate which have several subsidiaries often move funds worth millions of dollars back and forth. Currently, these fund transfers could be book entries or involve actual money. According to the ET report, corporates are trialing cryptocurrencies to “reconcile accounts, with actual money being transferred only at the end of the financial year or quarter.”

That said, these organizations have not decided on a definite timeline for scaling up the project.

"The biggest problem in for several companies is that there are several transactions between subsidiaries and the only record of these is minutes of meetings," said a senior technology official working on one of the pilot projects told the ET. "Many companies have huge cash transactions and to keep records of all these is tough, but blockchain can be a good source for record keeping too."