The Union Cabinet on Wednesday approved a joint research on the distributed ledger and blockchain technology by Export-Import Bank of India (Exim Bank) with member-banks of Brazil, Russia, India, China and South Africa (BRICS).

"(The Cabinet gave its) ...ex post facto approval for the Memorandum of Understanding (MoU) on collaborative research on distributed ledger and blockchain technology in the context of development of digital economy by Exim Bank," an official statement said.

Blockchain is a digitised, decentralised ledger to record real-time transactions across borders. Distributed ledger is a database held and updated independently by each participant in a large network across multiple sites, institutions or geographies.

Exim Bank, which promotes India's international trade through competitive financing, will participate with member-banks under BRICS Interbank Cooperation Mechanism, a Finance Ministry statement said.

The banks are Banco Nacional de Desenvolvimento Economico e Social (BNDES, of Brazil), China Development Bank (CDB), State Corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank, Russia) and Development Bank of Southern Africa (DBSA).

"Distributed ledger/blockchain technology holds potential for solutions to various challenges faced in the financial sector by BRICS nations," it said.

The MoU aims for a better understanding of the technology through joint research. It will identify areas within respective business operations for potential applications to enhance the operational efficiencies, the statement said.

The Xiamen Declaration signed in China on digital economy by the BRICS leaders had highlighted the importance of the digital economy and how the BRICS nations could leverage the thriving digital economy to boost global economic development.