H R Khan, Deputy Governor of Reserve Bank of India (RBI) on Friday suggested that the Indian central bank could set up a committee in order to study the use of blockchain technology to curtail the use of paper currency.

In a recent event conducted by Institute of Development and Research in Banking Technology (IDRBT), Khan highlighted that new technologies including mobile internet, cloud computing, virtual reality, blockchain technology and others need to be harnessed for improving payment and settlement systems.

“Blockchain is one thing that has come out of Bitcoin which provides a lot of flexibility in terms of financial transactions. So, we need to study... how this Blockchain technology can be used in financial transactions where the entire data systems move to some more levels,” Khan said during the event, as quoted by Livemint.

During the event, he also spoke about the Payment and Settlement Systems in India that need to work towards a less-cash economy. In addition, he highlighted 7 Cs including cash, capacity dimension and capability building, confidence, that help create sustainable models for the development of Payment and Settlement Systems.

"We have a group of officials from RBI, IDRBT and industry people which will look into this. There is a tremendous potential (in Blockchain technology)," Khan added.

Implementation of blockchain technology is found to be increasing in India. A week before, uTrade, an open source financial trading technology company based in India, announced the launch of ‘uClear’ which is India’s first blockchain technology solution for real-time clearing and settlement for financial markets.

In addition to this, India-based mobile bitcoin company Zebpay raised nearly $1 million in series A funding to develop blockchain technology.