Tag: Fintech

Categories
Web 3.0 Tech Fin Tech

A cashless society powered by blockchain technology

cashless society

Written by : Mosongo Jr on Digilah (Tech Thought Leadership)

Introduction

A cashless society is upon us; the question is simple: when will new technologies transform many industries, and payments are no exception? 

Governments, fintech companies, banks, and merchants are actively looking for ways to improve the payment experience, meet the needs of the unbanked, and curb crime and corruption.

In just a few years, we may see a world without cash. This isn’t some far-fetched idea; countries like Sweden, Finland, and China are already leading the way to a cashless society. And it’s not just small businesses that are making the switch; even major banks like HSBC are getting on board.

So, what does this mean for you? Imagine a world where you can pay for anything with the click of a button. No more waiting in line to buy tickets or groceries. No more fumbling through your pockets for change.

So what are you waiting for? Join the cashless revolution and experience the convenience and security.

You’ve seen the signs. Businesses are refusing to accept cash, your friends are talking about going cashless, and the media is full of stories about the coming cashless revolution.

So, what is the cashless revolution? 

Put simply, it’s a movement towards a society where physical cash and coins are no longer used. Instead, all payments are made through digital means such as virtual currencies like bitcoin, credit cards, debit cards, and mobile payments.

There are a number of reasons for this shift. 

Firstly, businesses see going cashless as a way to reduce costs. Cash handling and security cost money, whereas digital payments are much cheaper and easier to manage.

Secondly, many people are choosing to go cashless in order to avoid the hassle of carrying around coins and notes. 

And thirdly, governments and central banks are increasingly seeing a cashless society as a way to improve financial security and reduce crime.

The impact of the cashless economy on consumers and businesses is twofold. 

Firstly, it is a more convenient and faster way to pay for things. You no longer have to fumble for change or fumble with card machines. Instead, you can just scan your phone or contactless card and be on your way.

Secondly, it is more secure. With card fraud on the rise, businesses are increasingly looking for ways to reduce their liability. By moving to a cashless system, they can reduce the risk of fraud and protect their customers’ data.

There’s no doubt that a cashless society is becoming more and more prevalent, and blockchain is playing a major role in powering this change. 

Let’s explore some of the ways blockchain is being used to make a cashless society a reality. and why it could be the most used cashless payment method in the coming years.

The blockchain system


Blockchain-based payment systems are secure, efficient, and convenient. There is no need for third-party intermediaries such as banks, which means transactions can be completed more quickly and at a lower cost. 

Blockchain has also helped more than 2 billion unbanked people by giving them access to digital financial services from which they are currently excluded. Similarly, look at how mobile phones have transformed communications and financial services.

Blockchain and cryptocurrencies are expected to play a key role in enabling a cashless society. 

While skeptics argue that CBDCs may limit the privacy of our day-to-day transactions, cryptocurrencies offer anonymity and censorship resistance that could help prevent prying eyes from prying into our day-to-day spending habits.

Government agencies can easily add or remove CBDC from user accounts. However, public blockchain payments are immutable, meaning no one can change them or adjust your balance.

Additionally, cryptocurrencies will become a viable alternative to government-issued currencies as cashless societies become a reality across the globe. Crypto assets like bitcoin act as a hedge against currency depreciation, allowing individuals to protect their wealth without relying on central banks or governments.

Another key application of blockchain in a cashless society is in the area of fraud prevention. With traditional payment systems, there is always the risk of fraudulent activities such as identity theft and credit card fraud. 

By using blockchain, businesses can reduce these risks by creating a secure and tamper-proof ledger of all transactions.

Blockchain is playing a major role in powering the emerging cashless revolution. As more and more businesses adopt blockchain-based payment systems and fraud prevention measures, the cashless society will become more and more ubiquitous.


Countries Leading the Cashless Revolution

As the world continues to embrace a cashless future, certain countries are leading the charge by embracing blockchain-based cashless payments. El Salvador took the lead in accepting bitcoin as a legal tender, followed by the Central African Republic, and as of now, the Brazilian government is interested in making bitcoin a legal tender. 

Although Sweden, Finland, and China are at the forefront of the cashless society movement, they aren’t yet using the blockchain to build their cashless payment systems. Most payment systems will move to the blockchain space. 

JPMORGAN CHASE & CO., one of the world’s largest banks, is leading the way. thanks to their generous infrastructure and commitment to innovation.

These developments prove that it’s not only possible but highly likely for our society to become completely cashless in the nearest future, with most payment systems built on the blockchain.

Cultural Barriers to a Cashless World

Despite its numerous advantages, the transition to a cashless society is met with several cultural barriers. It is no secret that some countries may have an inherent distrust of digital payments due to a lack of financial infrastructure or poor monetary policy decisions. 

For example, in some African countries where cash is still used predominantly, people may not trust digital payments and prefer using physical cash instead.

Furthermore, the risks that come with digital payments remain unrecognized by many people, such as fraud and cyber security threats. This lack of understanding of the safety measures also prevents them from transitioning to a cashless society.

Ultimately, for us to move into a future where blockchain is at the forefront of payment technology, it is important to first overcome these cultural barriers by educating people and providing more secure payment systems.

What does the future hold for a cashless society?

As we move deeper into the 21st century, it is clear that the digital age is ushering in a new era of cashless transactions and financial freedom. The advent of blockchain technology is at the forefront of this revolution, allowing individuals to make payments quickly and securely with little risk of fraud or theft. 

Moving to a cashless society has its advantages, from increasing efficiency to being more accessible for those without access to traditional banking services. But it also presents some unique challenges, from potential cybersecurity risks to a lack of privacy for consumers.

Despite these possible drawbacks, experts agree that the advantages outweigh any potential pitfalls. As more countries adopt blockchain-based payment systems and move away from physical cash, we can expect to see increased convenience and security for consumers around the world. With the right infrastructure in place and necessary safeguards taken, the future looks incredibly bright for a cashless society powered by blockchain.

Conclusion

On the path to a cashless society, policymakers need to agree on a framework to drive the process forward. However, access to technology is one of the biggest factors in determining how quickly different parts of the world move away from cash. The transition from cash will only go smoothly if most people are familiar with digital payments. However, this is already a reality in many parts of the world.

Society is going cashless, and cashless transfers will soon become the preferred option over time. There are many benefits to going cashless. Going cashless not only makes life easier but also helps to verify and standardize the transactions that are made.

In a nutshell, a cashless society powered by blockchain technology is possible because of the features of blockchain, such as transparency, security, and immutability.

Most searched question

What is a blockchain technology?

What are the 4 different types of blockchain technology?

Most searched queries

Blockchain technology with example

Use of blockchain technology

Hello readers! Hope you liked what you read today. Click the like button at the bottom of this page and share insights with your colleagues and friends!

For more such amazing content follow Digilah

Categories
Digi Tech Fin Tech Med/Health Tech

HOW INDIA IS GETTING DIGITALLY LITERATE

Written by Rishikesh Patankar, Ph.D. on Digilah (Tech Thought Leadership)

The need for digital literacy in a country as populous and diverse as India is critical. The gap between limited availability of resources as against vast requirement could be addressed by use of technology. Technology can provide effective ways to scale up solutions and bridge the gaps. The technology and connectivity together can make a huge difference to the socio-economic levels of a community, and ultimately, the country, true progress comes from inclusive growth.

The Government of India has launched ‘Digital India’ – A programme to transform India into digitally empowered society and a knowledge economy. The Digital India programme envisages to ensure that Government services are available to citizens electronically. Under the ‘e-Kranti – Electronic Delivery of Services’, one of the initiatives includes ‘Technology for Education – e-Education’ under which ‘Universal Digital Literacy’ at the National level is envisaged.

I would like to share the experience gained in implementation of a successful Digital Literacy programme across India, led by CSC.

THE NEED FOR DIGITAL LITEREACY IN INDIA

The technology and connectivity could be utilized effectively for delivery of education, healthcare, citizen services, financial services etc. The true potential for these aspects can only be realized if all the citizens are made digitally literate.

The key is to have sustained efforts by harnessing collective energies, strengthening partnerships and leveraging them to pull down the divisive digital wall.

Digital literacy is therefore a key component of the Government’s vision of building an empowered society as envisaged under “Digital India initiative”. Spinoff effects of digital literacy especially in the context of rural India would address a number of socio-economic issues.

  • Rural population can gain immensely from the ‘Digital Literacy’.
  • ‘Digital Literacy’ would bring the benefits of ICT to daily lives of rural population in the major thrust areas of Healthcare, Livelihood generation and Education.
DIGITAL LITERACY GAP

As per Census of India 2011, 68.84 % (883 Mn) of population resides in rural India. The number of rural households is 168 million. 5.2% of these rural households possess a computer.

Computer Literacy (who can operate a computer) by age group in rural India:

14-29 years – 18%

30-45 years – 4%

46-60 years – 1%

In addition, a significant number of these households don’t have computer access and are likely to be digitally illiterate.

IMPLEMENTATION OF DIGITAL LITERACY

The implementation of the PMGDISHA Scheme is being carried out by the CSC e-Governance Services India Ltd. (CSC-SPV) which acts as the Programme Management Unit (PMU). More than 250,000 Training Centres have been empaneled under PMGDISHA to provide enrollment/training to the candidates. The Training Centres are spread across the country and are participating in achieving the goal of making India digitally literate.

In the years 2014 to 2016, two Schemes entitled “National Digital Literacy Mission” (NDLM) and “Digital Saksharta Abhiyan” (DISHA) were implemented with certification of 5.4 million candidates, out of which around 42% candidates were from rural India.

In February, 2017, the Government approved a scheme titled “Pradhan Mantri Gramin Digital Saksharta Abhiyan” (PMGDISHA) for ushering in digital literacy in rural India by covering 60 Million households.

Under this Scheme, as on 08/01/2022:

– 54.5 Mn candidates have been enrolled

– 46.2 Mn candidates have completed the training

– 34.30 Mn have been certified

TRAINING ESSENTIALS

  • Online Portal, Real-time Online Monitoring Tool for Analytics & Reports (www.pmgdisha.in )
  • Handbook & Multimedia content (in 22 Scheduled languages of India and English)
  • Mon-Sun, between (8 AM to 8 PM) we conduct online Remotely Proctored Examination System
  • Digital Signed Certificates are generated for all passed candidates. Digital Locker has been integrated with the system
WE COULDN’T HAVE DONE THIS ALONE

We had the support and capability of the below companies in carrying out this humongous task through their CSR initiatives.

IMPACT ASSESSMENT

3 impact assessment studies of the Scheme were carried out by:

  1. The Council for Social Development (CSD) in 2017-18.
  2. Indian Institute of Technology (IIT) – Delhi in the year 2019.
  3. Indian Institute of Public Administration (IIPA) in FY 2020-21.

The aim of the study was to analyze the ground level situation of the scheme with a larger aspect of continuation of the scheme.

The brief highlights of the impact assessment reports are:

  • PMGDISHA training has had a formidable impact on the use of ICT and other forms of digital media
  • 59% of the respondents stated that after attending the IT literacy training, their digital ability & confidence levels using digital has increased
  • Women participation is very large and their inclusion at the rural level will open the path for the learning of the whole family.
  • However, less participation of very poor and very illiterate was observed

We are very proud the Digital literacy drive continues in the country, aided with the integration, and help of NGOs and others under the leadership of CSCs.

Facilitated by PMGDISHA (Universal Digital Literacy for Rural India through Prime Minister Rural Digital Literacy Mission)

Subscribe to the below link for Digital lessons in many Indian languages: https://www.youtube.com/channel/UCbFPVWaOPS4tZ8EnXgXWwUg

Categories
Fin Tech

Transformation of the Indian Debt Market

Written by Sashi Kumar M C, Investment and Merchant Banker – Digilah (Thought Leadership)

Director at Solargise

The Balance of payment crisis in 1991, brought the liberalization of the Indian economy and with it came reforms of the financial system and capital markets. The thrust of these reforms was to promote a diversified, efficient, and competitive financial system, with the objective of improving the allocation of resources through operational flexibility, improved financial viability, and institutional strengthening.

The contagion effects of the 1997-98 Asian financial crisis further lent impetus to strengthen the domestic financial system. Reforms principally focused to: (i) Mitigate risks in the financial system; (ii) Efficiently allocate resources to the real sector; (iii) Make the financial system competitive globally; and (iv) Open the external sector.

India’s capital markets too were injected with reforms, specifically through the creation of various institutions such as the Securities and Exchange Board of India (SEBI) in 1992, an insurance market regulator (IRDAI) in 1999, and a pension market regulator (PFRDA) in 2003. National Stock Exchange NSE was incorporated in 1992. It was recognised as a stock exchange by SEBI in April 1993 and commenced operations in 1994 with the launch of the wholesale debt market.

These were a fall out of the report by L M Bhole, a professor of Economics at IIT-Bombay, who noted that “There are two major inadequacies which characterize our stock market. First, while the primary market is widespread, i.e., the new issues are distributed nation-wide, the secondary market is narrow, localized, fragmented, and imperfect. The stock exchanges do not have uniform settlement periods and dates; there is no national clearing system, and they are not integrated into a single unified national market system. Second, while a significant part of the primary market is in debentures, almost the whole of secondary market is in equities. In many developed countries, debt securities, especially long-term debt securities, account for a major part of the trading volume on stock exchanges.

Not just that, Indian bond markets had to fight its way into the very quagmire of corruption and kickbacks, Lack of Transparency plagued the market, as did in-efficient price discovery methods. Defaulted Bond holders raised fingers on credit rating agencies and they in turn raised questions on data sanity. One to one negotiations led to unethical means to place the bonds at unjustified premiums that led to a mismatch to traded market yields.

In contrast to equity markets, the bond markets have been held back by the more restrictive regulatory framework. Several reforms were introduced to the government bond market in 1992 when the price of newly introduced bonds was set by auction.

But it was not until 2005—11 years after the equity market—that bond market became an electronic order limit market. Adoption of Technology to achieve the set goals.

Over the past two decades, the Reserve Bank of India has adopted a strategy to create an efficient market infrastructure to enable safe trading, clearing and settlement. State-of-the-art primary issuance process with electronic bidding and straight-through-processing (STP) capabilities. An efficient and completely dematerialized depository system within the central bank. Delivery-versus-Payment (DVP) mode of settlement. Real Time Gross Settlement (RTGS). Electronic trading platform (Negotiated Dealing Systems – Order Matching) (NDS-OM) and a separate Central Counter Party (CCP) in the Clearing Corporation of India Ltd (CCIL) for guaranteed settlement.

Today, The Bond market activity has grown rapidly. Government securities market (G-Sec), corporate bond market and derivatives markets have become broad-based in terms of participation. Technology has given the ease and access to transact from anywhere, it has helped broad base not only investors but also products. Thus, driving the overall debt market size to a little over USD 2 Tn.

Government Bonds make majority of the market with sovereign yield curve spanning up to 40 years. Corporate Bonds are expected to double their growth to achieve Rs. 65-70 Lakh crore by 2025. Primary market issuances have increased resulting in large benchmark issuances. The volumes in secondary market have increased. The bid-ask spread of on-the-run securities continues to be low and so are the impact costs.  

With the increase in Fintech activities in this space, bond markets have spread their wings to reach all investors. So much so, that RBI now allows individuals under the Retail Direct Scheme, to buy Government Securities, SDLs, T-bills and Sovereign Gold Bonds.

Amidst all these positives brought about by the adoption of technology and digitalization, the regulators forget a key component – Human Resource.  Since 1992, a generation of Bond Market professionals have served a full cycle and retired.  A huge set of Bond traders and dealers, both in the primary and secondary market today face a different future……?