Cabinet approves MoU on Collaborative Research on Distributed Ledger and Block Chain Technology under BRICS Interbank Cooperation Mechanism

• The Union Cabinet chaired by Prime Minister Shri Narendra Modi has given its ex-post facto approval for the Memorandum of Understanding (MoU) on Collaborative Research on Distributed Ledger and Blockchain Technology in the context of Development of digital economy by Export-Import Bank of India (Exim Bank) with the participating member banks.

• In under the BRICS Interbank Cooperation Mechanism namely Banco Nacional de DesenvolvimentoEconomico e Social (BNDES, of Brazil), China Development Bank (CDB), State Corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank, of Russia) and Development Bank of Southern Africa (DBSA).

What are the major impacts?

• Distributed Ledger/Blockchain technology holds potential for solutions to various challenges being faced in the financial sector space of the BRICS nations.

• The MoU intends to enhance understanding of Distributed Ledger/Block Chain technology.

• The joint research efforts to identify areas within respective business operations where it may have the potential for applications aimed at enhancing the operational efficiencies.

Background of this technology

• The Xiamen Declaration signed in China on digital economy by the BRICS leaders had highlighted the importance of the digital economy.

• And also the BRICS nations could leverage the thriving and dynamic digital economy that will foster global economic development and benefit everyone.

• Accordingly, a Memorandum of Understanding (MoU) on Collaborative Research on Distributed Ledger and Block chain Technology in the Context of the Development of the Digital Economy was suggested to be inked by all member banks.

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Mains Paper 3: Science & Technology | developments & their applications & effects in everyday life

Prelims level: Blockchain technology, Xiamen Declaration

Mains level: How can blockchain technology be used across various sectors