Technology has advanced in the first two decades of the twenty-first century at a never-seen-before rate. This rapid development sparked the emergence of numerous new sectors and had a substantial influence on each of the already existing sectors. The financial industry is transitioning from CeFi to DeFi, or a centralized financial system to a decentralized financial system, with the introduction of developing technologies. CeFi and DeFi are currently the trendiest buzzwords.
In terms of blockchain technology, it has evolved from merely being a Bitcoin platform originated by Satoshi Nakamoto in 2009 to becoming a potential, ground-breaking technology that offers enormous value to companies in various industries. In addition to the government’s significant plans to incorporate this technology into other areas, this technology is making waves in India.
In this article, let’s see how the future of Blockchain and DeFi will be in India.
How can Blockchain revolutionize India?
Blockchain technology is going to revolutionize business, government, and individual growth in the coming years, and every blockchain development firm wants a share of the action.
The handover of land records, automated customs enforcement and compliance, hospital records, public service delivery, virtual certificate management, e-sign solution, vehicle registrations, agriculture/pharma supply chain, charitable donations, e-notary services, e-voting, duty payments, and more are the main areas that hold enormous potential for the application of blockchain technology in India.
Due to the built-in benefits of blockchain technology, infringing on any of the services mentioned above will be nearly impossible, thus sustaining the accountability of e-governance. Furthermore, blockchain technology can effortlessly assimilate already existing apps like ePramaan, DigiLocker, and eSign in addition to the present infrastructure and services. When these initiatives are integrated at a common level for all departments, the pace for the upcoming phase of IT reforms will reach greater heights.
The objectives and methods for accomplishing them have been outlined in the proposed government policy initiative for integrating blockchain technology. The blockchain development firm will securely store the data generated by the blockchain technology in a decentralized, time-stamped, and immutable way, which will offer an effective mechanism for distributed ledger storage.
DeFi and its impact
Since blockchain technology is helping every sector to grow and transform the business environment, transparency, security, efficiency, trust, accessibility, lower costs, and other factors provide an advantage that is many times bigger than the impact observed. These considerations are causing well-known companies to switch from Centralized Finance (CeFi) to Decentralized Finance (DeFi).
DeFi enables the autonomy and customization of operational activities between parties without the use of a middleman due to the lack of centralized control.
In DeFi, using Smart Contracts, a program that ties contract conditions so that they automatically stand executed when completed, many business functions are also automated. This also led to the creation of Non-Fungible Tokens (NFT).
The blockchain-based digital currency known as Central Bank Digital Currency (CBDC) is being used by central banks worldwide. This would synchronize the market and the ways in which market currencies are used as designed by DeFi with the centralized CBDC, which is digital money used by banks.
DeFi, Blockchain, and insurance industry (Use case)
The insurance sector is one of the most important DeFi and blockchain application use cases. Today’s insurance system is burdened by complicated paperwork, audit systems, and processes, as can be seen. Using blockchain-based smart contracts in such a situation might radically increase industrial productivity.
Benefits of adopting Blockchain and DeFi
The surge in DeFi adoption has boosted the expansion of DeFi-based prediction platforms, where individuals can exchange value by correctly predicting the results of future events. Additionally, the public can validate and verify all blockchain transactions.
Using virtual currencies and distributed ledger technology, payments can be scaled more quickly, affordably, and effectively. Even central banks are testing Blockchain because of its potential to save time, money, and effort. Additionally, it can help with the real-time gross settlement between independent, commercial, and central banks.
Blockchain technology can help banks streamline their KYC procedure as it has become a prerequisite for providing financial services. By offering a single digital source of ID and other related information, it has the ability to automate client identification while lowering fraud and enhancing real-time authentication. It also enables the easy exchange of papers between banks and other sources.
The financial services sector is considering Blockchain and DeFi as more secure and effective technological sources. Therefore, the future looks promising, as DeFi and Blockchain will develop new features and improve in terms of scalability and security as more individuals enter the digital asset industry.Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.