India’s blockchain tech to make SMS more secure is leaving users locked out of their accounts — and potentially more at risk

March 9, 2021 John Blockchain 0

  • India is using blockchain technology to filter out spam messages and protect users from SMS fraud.
  • Since the upgrade was implemented yesterday, users report not receiving one-time-passwords from legitimate sources like their banks, digital payments apps and even government entities like Aadhaar authentication.
  • Filtering out useful messages leaves users at risk of cyber fraud with alerts of unauthorised transactions also getting filtered out.

One-time-passwords (OTPs) aren’t just for financial transactions. They are central for logging into email accounts, authenticating new memberships, or just signing into Amazon on a new device.

Understandably, when smartphone users in India saw that OTPs weren’t coming in anymore, they were upset.

Not just from private players — like
Axis Bank, Paytm, Goibibo and others — but users who are not getting their OTPs from government entities like the Indian Railway Catering and Tourism Corporation (IRCTC), the State Bank of India (
SBI) and Aadhar Authentication getting blocked out.


“We are unable to reach the authentication service to serve you OTP. Please try again,” it said on the Aadhar service’s official website.

Why aren’t OTPs coming through?
This whole drama is unfolding because the Telecom Regulatory Authority of India (TRAI) started to implement the second phase of the SMS regulations on March 8. The transition has been less than smooth to say the least, with companies may not have registered in time getting locked out.

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The government’s new process is designed to curb spam and fraud messages. Using a blockchain-based solution, telecom operators can now verify commercial messages and their source using a template for such communication.

Unregistered messages, which do not follow the template, will be blocked as potential fraud. And, that’s what’s happening to your OTPs.

Telecom operators are
defending the digital ledger system and pointing the finger at companies who failed to register in time. According to them, the onus lies on telemarketers and individual businesses to comply with the standards.



Safer or temporarily more at risk than usual
Content scrubbing is a good move to keep spam at bay. But, what’s not good is when a pesky filter keeps useful messages from coming through as well. In fact, such a move could put users more at risk.

“Close to 50% traffic is getting dropped because of content scrubbing. Officials from India’s top banks including HDFC and SBI are extremely furious and dialling TRAI to address the mess at the earliest,” a top executive at a leading telemarketing firm told
The Economic Times.


Without messages coming through from your bank, not only do your own transactions hit a wall but there’s no alert if someone else is trying to make a transaction from your account. This increases the chances of cyber fraud.