The Indian Union Cabinet chaired by Prime Minister Narendra Modi has agreed on an ex-post facto basis to carry out joint blockchain research with other BRICS nations.

“Distributed ledger or blockchain technology holds potential for solutions to various challenges being faced in the financial sector space of the BRICS nations,” the cabinet says in a statement.

BRICS representatives have signed a Memorandum of Understanding (MoU) for Collaborative Research on Distributed Ledger and Blockchain Technology. The research will be conducted by the EXIM Bank of India and other member banks of BRICS nations, which includes Brazil, Russia, India, China and South Africa. It is aimed at boosting developments in the digital economy.

Enhancing operational efficiencies

“The MoU intends to enhance understanding of distributed ledger or blockchain technology, through 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,” a press release reads.

The MoU came into effect after the Xiamen Declaration signed last year by BRICS leaders gathered in China.

Leveraging digital economy

The Xiamen Declaration also highlights how the BRICS countries could leverage digital economy to foment global economic development.

India Finance Minister Arun Jaitley recently indicated that his government was open to exploring blockchain applications. However, he adamantly ruled out any future for cryptocurrencies in India’s economy.

“The government will take all measures to eliminate the use of crypto assets in financing illegitimate activities,” Jaitley said. “The Government will also explore the use of blockchain technology for ushering in the digital economy.”