The Future of Finance: Introducing the “Finternet”
In a world where digital transactions are instant and seamless, the financial industry still lags behind in terms of cost and efficiency. However, a revolutionary concept called the “Finternet” is set to change the way we think about money and transactions.
At the core of the Finternet is the idea of a unified ledger, a giant scoreboard where customers can track their e-wallet activity. This ledger will contain different types of coins representing securities, bank deposits, central bank digital currencies, and even real-world assets like property and art. Customers will be able to swap tokens with each other using pre-programmed logic, ensuring that no transaction occurs without proper payment.
Tokenisation, the process of converting traditional securities into digital assets, could open up a $22 trillion market in alternative assets to the middle class. This could provide liquidity to investors seeking higher returns in private equity, hedge funds, and infrastructure projects.
One of the key benefits of the Finternet is the potential reduction in costs for cross-border transactions. By streamlining the process of debiting and crediting accounts and reconciling ledgers, the system aims to eliminate delays and expenses that currently burden small businesses and individuals.
While the vision of the Finternet is ambitious, there are challenges to overcome, such as fraud mitigation and ensuring user privacy. However, countries like Brazil and initiatives like Agorá by the Bank for International Settlements are already making strides towards implementing this new financial system.
Although the road to widespread adoption of the Finternet may be long and complex, the potential benefits for consumers are immense. As the financial industry evolves to meet the demands of the digital age, the Finternet could revolutionize the way we think about money and transactions.