Cryptocurrency and blockchain are making a name for themselves and becoming quite popular in businesses across the globe. But the main attraction that it seems to grasp is from its application in the supply and logistics blockchain.
Several large enterprises are now using it to ensure that inventory from start-to-sale can be accounted for.
A Norwegian company called DNV, which is the world’s largest classification society providing services for 13,175 vessels and mobile offshore units, is one of the early adopters of blockchain logistics and uses VeChain, which is is making a name for itself as an “enterprise-focused supply chain and logistics blockchain solution.”
The VeChain foundation has partnered with n number of enterprises like Price Waterhouse Coopers, National Research Consulting Center (China), Yida China Holdings, and BitOcean, a crypto exchange. Apart from this, VeChain is also in talks with other major companies like BMW, LVMH, BYD(China) for its cryptocurrency blockchain solution.
The company’s blockchain solution is a dual token system with inflationary and deflationary forces.
“The VeChainThor network uses a primary token called VET. VET has a fixed supply. Holding VET generates the secondary token called VTHO. VTHO has a controlled inflation rate, as well as a deflation rate (VTHO burn during transaction).”
The monetary policy of the system is managed by a steering committee but is voted on by those who hold VET tokens. This managed and deflationary policy ends up with a slightly inflationary supply of the VTHO tokens, which are used in transactions.
One of the most attractive features of using cryptocurrency as a logistics blockchain solution is transparency and the Proof of Authority. The blockchain solutions itself works on a proof of authority system.
Cryptocurrency as a logistics blockchain solution in India
Now as the trend gains popularity across the globe it is likely to be seen growing in India as well.
It should be noted that cryptocurrency (bitcoin) trading was banned in India in 2018 due to the anonymity of blockchain-based transactions.
The unidentifiable host, or an operator and the nodes that are spread across the globe with transactions occurring between the nodes located in different jurisdictions, caused difficulties in the application of regulations in case of any legal, policy, or regulatory issue.
In such cases, identifying the liable entities and penalising them for wrongful conduct was becoming an issue for the regulators.
However, a transparent blockchain that itself works on a proof of authority system can rule out the issues and reintroduce the use of cryptocurrency in India. Since the ban of bitcoin in India, many blockchain-based supply chain solutions have been tested by the government and private entities that limit the scope of record tampering or deletion and streamline the process of maintaining records.
A report submitted to the Finance Ministry in 2019, by the inter-ministerial committee which was set up to study and provide recommendations on cryptocurrencies and Blockchain recommended a ban on cryptocurrencies, and also formulated a draft law. However, it also asked the government to keep “an open mind on the potential introduction of an official cryptocurrency”, while also looking to deploy blockchain.
