Sebi okays blockchain technology for NCDs

Mumbai: To make the record-keeping process related to securities traded in the market more secure, Sebi on Wednesday asked depositories to use distributed ledger technology — popularly called blockchain technology — to record and monitor credit ratings of non-convertible debentures (NCDs) and creation of charges on these securities like pledges, among others.

The distributed ledger technology has the potential to provide a more resilient system than the traditional centralised databases, the markets regulator said in a statement. It offers better protection against different types of cyberattacks because of its distributed nature, which removes the single point of attack possibility, it said.

Sebi said that a platform for security and covenant monitoring systems, hosted by depositories, is being developed. Usage of blockchains for these purposes on the new platform will be effective April 1, 2022.