Finternet: A New Financial System Integrating Blockchain Technology

According to Blockworks, a new initiative called the 'finternet' is being developed by contributors to India’s UPI digital money system. The Bank for International Settlements, along with financial magnate Nandan Nilekani, co-founder of Infosys, discussed the finternet in a paper published in April. Since then, Nilekani and Siddharth Shetty, a former advisor to the Indian Ministry of Finance, have been promoting the project at various events, including a demo at the Global Fintech Fest in late August and a talk at Solana Breakpoint last month. The finternet aims to create a forward-looking financial system by tokenizing assets on multiple interoperable financial ledgers, essentially building the economy on blockchain rails instead of traditional financial systems. During the demo, Nilekani showcased the finternet by sending 2,000 rupees and settling the transaction on Solana. Despite being in its early stages, the project has garnered attention due to the involvement of prominent figures like Nilekani and Shetty, who were instrumental in developing India’s Unified Payments Interface (UPI). UPI, launched by the Indian government in 2016, is a significant digital payments program that processed over 100 billion transactions in 2023. However, the finternet is distinct from UPI, focusing on unifying the financial system across various asset types and geographies. The Solana Foundation and Superteam India, a Solana community organization, are also contributors to the finternet sandbox. While it remains to be seen how impactful the finternet project will be, its integration with Solana and the involvement of major institutional players suggest it could play a significant role in the future of blockchain-based financial systems.