‘Finance is seduction’: Zoho’s Sridhar Vembu challenges Nandan Nilekani’s grand plan for land tokenisation

Zoho founder and the company's chief scientist, Sridhar Vembu has raised serious concerns over the push to tokenise land assets in India, cautioning against the dangers of excessive financialisation. His warning comes amid growing advocacy for digital land tokenisation, led by Infosys co-founder Nandan Nilekani, who recently had outlined his bold vision of transforming of India’s vast but illiquid land holdings.

Vembu, a vocal critic of unchecked financial engineering, took to social media to highlight what he calls the "Fundamental Axiom of Financialisation"—the belief that making every asset liquid is inherently beneficial.

He warned that such an approach could lead to speculative bubbles, detaching land prices from their real economic value. “Just because an asset can be traded doesn’t mean it should be,” he argued, stressing that in an agricultural economy like India’s, rapid financialisation might displace farmers, fuel inequality, and destabilise rural communities.

His caution stands in contrast to Nilekani’s vision, which sees tokenisation as a way to unlock India’s vast but underutilised wealth. Nearly 50% of India’s assets are tied up in land, much of it rendered unusable due to unclear ownership titles, making sales and loans difficult. Nilekani proposes digitising land titles on a secure ledger, enabling verifiable and tradable ownership.

“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 just sitting there,” Nilekani said. By turning land into digital tokens, he argues, owners could sell portions of their property or use it as collateral, potentially driving investment, entrepreneurship, and economic growth. He also contends that blockchain-backed records could reduce disputes over ownership, cutting down on India’s backlog of land-related litigation and making transactions more transparent.

However, Vembu’s warning underscores the need for caution. The prospect of land financialisation raises concerns of wealth concentration, where corporate entities and institutional investors may acquire vast tracts of land, displacing traditional owners. India has already witnessed instances where rapid financialisation has led to economic distortions, and applying the same principles to land could exacerbate existing inequalities.

"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," Vembu argued.

He further said that finance by its very nature, is synonymous with seduction. "Companies would arise to offer "instant cash out" of tokens on farm land, homes and so on. I am afraid where this path would lead," Vembu cautioned.

"Ancient wisdom born of experience tells us that finance should be carefully controlled. Left unchecked, finance can lead to ruin," he added further.

The debate between Nilekani and Vembu reflects broader tensions in India’s economic policymaking—how to modernise without triggering instability.

Experts suggest that a phased approach may be the way forward, beginning with urban and semi-urban areas where land records are clearer while keeping agricultural land under stricter regulation. Pilot projects backed by robust legal frameworks could help assess the viability of tokenisation before nationwide adoption.

India’s land dilemma encapsulates the country’s larger development challenge—vast potential hindered by systemic inefficiencies. While Nilekani’s vision presents a futuristic solution, Vembu’s caution highlights the risks of moving too fast. The path forward may lie in a balanced approach.