Peer to Peer Restricted Distributed Ledger Technological (P2PRDLT) Arrangement - A Proposed Model in Indian Payment System

By : Rahul Jairam Nikam

Page No: 60-66

Abstract
Technological innovations in financial sector, commonly known as Fintech, have the potential to transform the present financial practices across the globe. Here, the application of Distributed Ledger Technology (DLT)/blockchain technology has garnered wide interest within the central banking community and the regulators as it is having a potential to overcome from present critical challenges in financial inclusion and transformation. Such as the currency and critical payments infrastructure (payment, clearing and settlement processes), operational & risk management, cyber resilience, how funds are transferred and used in securities market to clear and settle securities, commodities and derivatives. As there is no accepted term & potential having wide spectrum of possible deployments of DLT arrangement, various industries are using various ways according to their needs. The paper explains, reviews the different DLT arrangements, and their potential benefits and challenges in implementing it in the retail segment’s payment infrastructure in India. This paper proposes a model DLT arrangement in the form of Peer to Peer Restricted Distributed Ledger Technological (P2PRDLT) Arrangement and related architecture resilience with present payment framework in India. In P2PRDLT arrangement, care is taken wherever it is necessary, control and present responsibilities of various participants (Nodes) are retained and synchronized. The paper envisages the need for integrating the new fintech potential implications for efficient systemic stability, innovations and overall safety for financial markets more broadly as a positive step from the present classic banking towards taking India to Payments 2.0 Banking.

Author :
Rahul Jairam Nikam : LL.M, Ph.D., Associate Professor of Law at Faculty of Law, Marwadi University, Rajkot, Gujarat, India.
 

DOI: https://doi.org/10.32381/PROD.2020.61.01.6