Co-founder of Infosys Nandan Nilekani underlined the importance of bringing the power of cryptocurrencies and tokenisation to the regulated financial world. Speaking at the Global Fintech Fest 2024, Nilekani said, “Cryptocurrencies were outside the system, in effect on their own planet, and we have seen the consequences of that. What we need to do is to bring the power of cryptography, the power of tokenisation, to our regulated financial world. Where we have rules to have KYC, against money laundering and so on.”
What is Finternet?
Nilekani was outlining his proposition, “Finternet” which was introduced in April by Agustin Carstens, former head of Bank of International Settlements, in a paper that Nilekani served as a co-author for. Carstens proposed the concept of the “Finternet” as a vision for the future financial system: multiple financial ecosystems interconnected with each other – much like the internet. The Finternet would be designed to empower individuals and businesses by placing them at the centre of their financial lives.
Nilekani proposes Finternet to be the best solution to bring the technology of cryptocurrency into the regulated financial sector. The underlining concept, Nilekani explained, will be to bring together all kinds of asset classes, be it a registered land, a regulated financial product, bonds, deposits, horses or even paintings – allowing them to be tokenised – and accessed over a universal infrastructure which will be secure and regulated.
Three U’s
“Finternet is a new approach to global finance, which is defined with three U’s. It is user-centric. It puts the user at the heart of what we want to solve because users want more control over their lives, over their assets, over their destiny. It has to be unified, which means that it should cut across all asset classes…And, you need a universal infrastructure on which all of this works. We underestimate the value of universal infrastructure,” Nilekani said.
He added, “We want to have something which allows everyone to participate and control all kinds of assets. User-controlled assets, user content, NFTs (non-fungible tokens), adjusted assets which are certified by somebody, registered assets like land, or regulated assets like financial products. All of them should be able to participate in this economy. We need a good way of protecting them from the downsides.”