Sridhar Vembu takes on Nandan Nilekani's 'tokenisation of land assets': It's seductive but...

Infosys co-founder Nandan Nilekani recently shared a thought-provoking solution for millions of landowners across India are stuck with land that cannot be easily sold or used as collateral. The Aadhaar architect suggested tokenisation of land -- a process that would digitize land titles and make them tradable on a ledger, much like financial assets such as stocks or bonds.

“This land is an asset, but you cannot do anything with it. You can’t sell it, you can’t take a loan against it. It’s like an asset that’s there, but it’s just sitting there, unable to be utilised," he said. "The time is right for another massive unlock: Tokenisation of land assets."

The time is right for another massive unlock: Tokenisation of land assets. To understand how this can turbocharge the economy, seeFull video here: https://t.co/NboKoiSIXh pic.twitter.com/JlGeBEneYn
Nandan Nilekani (@NandanNilekani) April 1, 2025

But Zoho co-founder and Padma Shri awardee Sridhar Vembu pointed out a few concerns with such a practice.

He said that the idea of "tokenization of land assets to unlock wealth" relies on the crucial assumption that "making every asset liquid and tradeable is always a value creating activity".  "I call that assumption the Fundamental Axiom of Financialization, Vembu said. "Yet when we financialize every asset and thereby increase their moneyness, it eventually would lead to extreme concentration. How so? As an example, a person with a gambling or drinking problem could now easily monetize a part of their home to fund their habit."

The Zoho chief scientist added that the idea isn't far-fetched, but finance is seductive. He said that tokenisation of land would lead to companies offering "instant cash out" of tokens on farm land and homes. "I am afraid where this path would lead," Vembu said. "Ancient wisdom born of experience tells us that finance should be carefully controlled. Left unchecked, finance can lead to ruin."