Blockchain Breakthrough: Pioneering Instant Settlement & Fair Play In India’s Stock Markets

Kundu believes that just as electronic systems once replaced chaotic manual processes, blockchain is "tomorrow's technology" poised to revolutionise settlement, transparency and market efficiency across India.

The Next Evolutionary Step: From Open Outcry to Electronic Market

Kundu, drawing on nearly 30 years of experience in financial services, interpreted the upcoming change within India's markets. She recalled the dramatic shift 30 years ago when the industry transitioned from the risk-prone "open outcry" trading environment to transparent electronic markets. Technology played a significant role in bringing transparency and encouraging participation, including from retail investors, where previously there was none.

However, the next evolutionary step is non-negotiable. Kundu firmly asserted that "tomorrow's market will be based on blockchain". The crucial motivator for this shift is the quest for ultimate efficiency and security.

Blockchain: The Architecture of Instant Settlement

The primary application of blockchain in this context is instant settlement. Kundu told host Vivek Law that settlements historically happened at T+15 (Transaction date plus 15 days), which evolved to the current T+1 model. The industry is now anticipating a move to instant settlement.

For settlement to become instant, the transaction and the settlement must happen simultaneously. This is precisely what blockchain technology is engineered to achieve. Furthermore, this system packages the entire route into a secure data packet, ensuring a comprehensive audit trail for the market.

This technological leap is comparable to the introduction of depositories, which allowed the market to move from trading physical shares to dematerialised (demat) equity, creating a "simpler way to transact" and a "healthier way to transact". Kundu emphasised that value-based assets like equity and corporate bonds can be tokenized using this technology, a process she distinguished clearly from non-value-based assets like cryptocurrency.

Redefining Market Structure: Transparency and Fairness

The successful implementation of blockchain necessitates the alignment of three crucial components: regulatory framework, market framework and product framework. While the adoption of blockchain presents a monumental disruption that is highly beneficial for investors, Kundu stressed that this efficiency does not render market participants irrelevant.

Intermediaries like brokers will remain important because the exchange acts as a central piece in a two-way market that is buying and selling, unlike a one-way model like Amazon. The technology instead changes the market structure itself, making it more efficient and bringing in "money-to-money efficiency," transparency and fundamental fairness.

The goal of the exchange remains steadfast by guaranteeing a fair and equitable market where a small investor putting in INR 1,000 receives the same price, access and benefit as a large investor putting in INR 100 crore.

Tackling Financial Illiteracy and Investor Behavior

To achieve widespread reach, that is taking the 10 crore investor base to 40 crore by reaching Tier 3 and Tier 4 cities, technology alone is insufficient, education and awareness are essential, said Kundu. Investors must understand that they must manage their hard-earned money carefully.

Improving the ecosystem means increasing awareness, education and strengthening the risk framework through higher margins or mandatory investor certification.

Leadership and Advice for Women Investors

Recognised as a rare woman leader in Indian finance, Kundu offered specific advice to women, traditionally known for saving but often reliant on male relatives for investing. Her message was, "Live your dream, live it boldly".

For financial independence and career growth, women should use their inherent positive mindset and strong instinct. Investing should be tackled step-by-step, starting small with simple products and investing responsibly, understanding that mistakes are possible, but crucial to learn from.

On leadership, she noted that she mandates an increase in the women ratio in her organisation to set an example, emphasising that equality requires support from both genders. Her final counsel is to "be true to yourself, recognise your calling. Just start, the paths will open up".

Global Context of Indian Growth

MSE’s commitment to adopting cutting-edge technologies like blockchain is tied directly to India’s massive growth trajectory and expanding investor base. India’s population of 150 crore, currently served by only around 10 crore demat accounts, signifies enormous untapped potential, with a near-term target of 40 crore accounts.

To reach this goal, especially in Tier 3 and Tier 4 cities, MSE recognises that technology alone is not enough and that education and awareness are essential. Ultimately, implementing breakthrough technology like blockchain is integral to advancing the Indian market ecosystem, supporting its rapid growth, and fulfilling the objective of enabling wealth creation for all investors.