Blockchain-based distributed ledgers may soon power the future of banking in India after the research arm of the country’s central bank successfully tested the platform across a range of financial institutions.

The Reserve Bank of India’s Institute for Development and Research in Banking Technology ran the trial in conjunction with regulators, banks, financial institutions and clearing houses. Its findings were published in a paper titled, “Applications of blockchain technology to banking and financial sector in India.”

According to the paper, the trial was successful and managed to demonstrate that the “blockchain has the potential to address certain limitations of the current [financial services] processes by modernizing, streamlining and simplifying the traditional siloed design of the financial industry infrastructure with a shared fabric of common information.”

The trial, which was run in conjunction with New York-based blockchain solutions startup MonetaGo Inc., didn’t stop at suggesting that the technology could modernize financial transactions. It also said it could be used to digitize India’s currency as well.

“From a technological perspective, we feel that [blockchain] has matured enough and there is sufficient awareness among the stakeholders which makes this an appropriate time for initiating suitable efforts towards digitizing the Indian Rupee through [blockchain],” the paper notes.

While the paper itself was positive on the use of the blockchain, others warned that it was still early days. MonetaGO Chief Executive Officer Jesse Chenard told the India Times that while the trial was believed to be the first-ever end-to-end test of blockchain using existing banking protocols, scale is still required to make a rollout happen.

“Until you have a platform that multiple parties can use and connect to, you can’t get a real network effect,” Chenard noted. “As with any new technology, entrants rely on different platforms and methodologies and it will take some time for standards to evolve. Most bank experiments to date have been either with single institutions or with only a couple of parties to a transaction. And then again, those have been in closed sandbox environments that were deployed simply for testing purposes.”

Image credit: Biswarup Ganguly/Wikimedia Commons/CCA 3.0