SEBI is the regulator of the Indian securities market. On Jan 23, speaking at a research conference on ‘Changing Landscape of Securities Market’ organized by the National Institute of Securities Markets, Patalganj, Tyagi said that applications of blockchain, artificial intelligence and machine learning have the potential to bring a paradigm shift in the securities markets landscape.
The Chairman of Security and Exchange Board of India(SEBI), Ajay Tyagi makes a bet on blockchain technology and urges exploration of the best possible usage of blockchain in securities markets.
“Blockchain could be used in clearing, settlement and record-keeping given its benefits in maintaining records in distributed ledgers, while still being a single source of truth.”
He takes example of some international blockchain projects and asks for research in these areas.
“Blockchain-based solutions are being developed by some foreign exchanges for settlement and by domestic exchanges for KYC recordkeeping purposes. There is a need for active research into these technologies to explore their best possible usage in securities markets.”
More weight on the latest technologies
Tyagi also emphasized the use of the latest technologies, including artificial intelligence, machine learning and blockchain to streamline the securities market. Technology has played a major role in transforming the capital markets. He said:
“Catching malpractices in the market using the standard tools is increasingly getting difficult. SEBI has already planned Data Lake project to augment analytical capability with advance analytical tools viz., AI/ML, deep learning, big data analytics, and natural language processing, etc.”
Although the Indian government is positive about the use of blockchain in multiple cases, it is not specifically positive on cryptocurrency. As Cointelegraph reported, the Supreme Court of India is hearing a petition filed against the ban on the banking channel imposed by Reserve Bank of India. The next hearing on this case is scheduled for Jan. 28.
Secure Encryption Key Management Modules, Explained
An algorithm created by cryptographer Adi Shamir, called Shamir’s Secret Sharing, lies at the heart of multiparty computation. A
secret sharing scheme involves distributing pieces of one secret value (private key) across multiple network nodes or users. Only once a specified subset of the parties pool their pieces together can they retrieve the value.
On its own, this allows us to split data up securely over geographic locations. However, this concept can also apply to performing computational tasks on a secret shared value known as secure MPC.
Using protocols associated with the secret sharing scheme, the parties can perform any computational task on the shared data without needing to bring the associated parts back together.
The secure MPC concept can apply to any type of private data, whether it’s personal data, shared corporate data or a user’s private key.
The traditional demonstrative example is to consider two or more hospitals that wish to conduct a statistical analysis of their patients. With MPC, they can obtain the resulting statistics without ever having to reveal the details of their own patients to the other hospitals.
The same idea can be applied to private keys associated with cryptography. In the hospital example, instead of combining sets of (patient) data, the data (single private key) is instead split into multiple pieces of data, which is then stored in separate locations. These locations can then use MPC to compute any computation using the private key, for example a signature, without the private key needing to be reconstructed.
For example, a Bitcoin private key could be split into pieces, with each piece encrypted separately. Each piece is distributed to a network node. The network can perform computations on the data while keeping the underlying data encrypted and, therefore, private.
The concept of MPC has been around for decades. However, practical use cases have only emerged over more recent years. Now, the technology is finally gaining traction, having been featured in various Gartner Hype Cycles since 2017. MPC is already in use by some of the world’s leading banks and technology firms, protecting assets worth billions of dollars.