During today’s BIS Innovation Summit, BIS General Manager Agustín Carstens elaborated on the concepts of the Finternet and the Unified Ledger. The latter came first, a big vision to rewire the financial system using tokenization and programmable assets, whether that’s central bank money, tokenized deposits, or tokenized assets such as real estate.
While the Unified Ledger represents the wholesale finance vision, it doesn’t appeal much to the average person. After a chat with his friend Nandan Nilekani, the co-founder of Infosys, they expanded that concept to a user-centric Finternet. In this vision of the future of finance, the individual has tremendous financial choices without frictions and high costs.
Mr Carstens again spoke of his time as Governor of the Bank of Mexico, which used a DC9 airplane to distribute cash. Every year the maintenance costs were significant. Eventually he concluded that they needed to ditch the 40 year old DC9 and get a new plane, resulting in massive cost savings. Likewise he argues that minor tweaks to legacy financial systems can only get you so far and can hold back innovation. At some point there’s a need to take a big leap. This was the topic of his opening keynote.
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