The National Payment Corporation of India (NCPI) has announced that it will issue a new blockchain platform that will facilitate payments. Dubbed the Vajra platform, the blockchain the goal is to make payments a lot more seamless, transparent, and quicker.
According to a 17-page official document, the NCPI states that it did not consider using a permission-less system. The Corporation says that the blockchain is developed strictly for the payment processing industry, and permission is required.
According to the NPCI, There will be three kinds of nodes involved. The Participant Node on Vajra will be all banks, which can post and view transactions on the platform. Secondly, there is the Clearing House Node which has admin rights and will be controlled by the NCPI. Lastly, there is the Notary Node which receives transactions strictly from the Clearing House node.
The document describes the process of clearing and settlement on the Vajra platform in five steps. The process begins when one party initiates a transaction using a POS terminal, internet banking or via the platform’s app. After that, the bank node receives the transaction via an application programming interface (API) and then record the transaction on the blockchain.
The next step is validation, which sees Smart Contracts on the platform validating the transaction based on already designed business rules. After this, all successfully cleared transactions are then recorded on the platform and the Clearing House Node and Participants Nodes can all see the data recorded. The document then states that every 15 minutes, the Corporation creates clearing files from the platform and then posts the same to the Reserve Bank of India (RBI) for settlement processing.
The RBI still has plans to issue its own Central Bank Digital Currency (CBDC).
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