New Delhi, May 12 -- At the Global Fintech Fest in Mumbai last year, the governor of the Reserve Bank of India (RBI) announced the launch of a "next-generation financial market infrastructure," designed to "tokenize financial assets and settlements."

While it received no more than a passing mention in his speech, the Unified Markets Interface he mentioned appears to be an early signpost of the direction in which the digitization of India's financial sector is likely to progress.

To understand the significance of this announcement, it is important to be clear about what a tokenized asset is and how it works. Tokenization is the process of representing a financial asset as a digital entry on a shared ledger, so that the entry itself becom...