'Need a universal infrastructure': Infosys' Nandan Nilekani unveils vision for future of global finance

In an important address, Nandan Nilekani, co-founder and now the non-executive chairman of Infosys, today outlined a transformative vision for the future of global finance, advocating for a revolutionary approach that merges traditional financial systems with advanced cryptographic technologies.

Nilekani began by reflecting on the evolution of technology, drawing parallels between past and present innovations. “Just as email became universal with the advent of SMTP, we have seen a similar convergence in devices with the emergence of smartphones,” he remarked. He underscored how this technological convergence unlocks exponential value, suggesting that financial services could benefit from a similar approach.

Central to Nilekani’s vision is the concept of an "Internet for Finance," which he described as a user-centric platform designed to unify various asset classes — from shares and bonds to real estate and art—into a single, accessible system. “We need a universal infrastructure on which all of this works,” Nilekani asserted, emphasizing the importance of a robust and universal framework.

A significant component of this vision is tokenization, which Nilekani explained as a return to a more straightforward, paper-based representation of assets but in a digital format. “With tokenization, we can have self-described, self-contained packets that encapsulate all attributes of an asset,” he said. This approach, supported by advances in cryptography, promises immutability and verifiability, crucial for ensuring the security and integrity of financial transactions.

Nilekani highlighted the role of existing financial actors — such as banks and asset managers — in this new system. They would be responsible for tokenizing their respective assets, which would then be recorded on a unified ledger. “We’re not saying use only one type of ledger; it can be any underlying technology,” he explained, stressing the importance of interoperability and composability across different ledger systems.

The proposed architecture aims to bridge the gap between regulated and unregulated systems by integrating cryptographic technologies within existing regulatory frameworks. “Can we combine the best of a regulated world with the power of tokenization technology?” Nilekani asked, presenting a vision where financial transactions are both secure and compliant with regulations.

Illustrating the practical applications of this system, Nilekani shared scenarios such as obtaining a loan against property or insuring invoices using tokenized assets. “In the new world, you can tokenize your documents, secure loans, and manage insurance in a streamlined, digital manner,” he explained. He also pointed out that tokenization could facilitate more efficient dispute resolution by providing a complete, immutable record of transactions.

Nilekani concluded his speech by emphasizing that this vision is not just theoretical but is already being developed. “We are seeing tremendous energy and activity around the globe with global hackathons and local ecosystems coming together,” he said. He invited the audience to engage with the evolving project, hinting at ongoing demonstrations and developments that will further showcase the practical implementation of his ideas.