Recently, the ex-chairman of UIDAI described the idea of ‘Finternet’ at the Global Fintech Fest (GFF) in Mumbai.
About Finternet:
It refers to the multiple financial ecosystems interconnected with each other, much like the internet.
It would lower barriers between different financial services and systems, drastically reducing the complex clearing and messaging chains and other frictions that hinder financial system.
Working: It would be built on unified ledgers which will bring multiple financial markets such as tokenized assets, shares, bonds, real estate, on a single programmable platform.
It has the capability to enable individuals and businesses to transfer any financial asset they like, in any amount, at any time, using any device, to anyone else, anywhere in the world. Financial transactions would be cheap, secure, and near-instantaneous.
Advantages: It will be user-centric, unified, which means it will cover all types of assets, with a universal infrastructure.
Significance: It would reduce the complex processes that happen behind-the-scenes today and make transactions slower and expensive.
Central banks would remain at the core of the system, ensuring trust in money, but (like today) work closely with commercial banks.
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