How RBI’s tokenisation push could shape the future of crypto in India

The Reserve Bank of India’s pilot to tokenise certificates of deposit (CDs) on wholesale CBDC (wCBDC) rails could mark a pivotal shift in the country’s financial architecture. Beyond faster settlements and lower back-office friction, it creates a regulated pathway for digital assets, connecting traditional finance with blockchain-era infrastructure and potentially reshaping India’s approach to crypto within a compliance-first framework.

From technical pilot to strategic platform

In October 2025, participating institutions began issuing tokenised CDs and settling them over wCBDC rails. At face value, the pilot targets efficiency: near-instant settlement, reduced reconciliation costs, improved liquidity, and better auditability. Beneath the surface, it proposes a template for how tokenised instruments can operate safely within India’s regulated environment, preserving enforceability and oversight while leveraging distributed-ledger benefits.

This is not RBI’s first tokenisation initiative. India’s card-tokenisation regime has been in place since 2022 to reduce fraud tied to card-on-file storage, and hundreds of millions of card tokens have already been issued. The next step—tokenising money-market instruments—extends the approach from consumer payments security to capital-market infrastructure.

Why this matters for India’s crypto trajectory

India’s crypto market has evolved into a sizable ecosystem, with growing participation from beyond the metros. A young, tech-native population, expanding internet penetration, and active developer communities offer fertile ground for blockchain innovation. Yet regulatory uncertainty, high taxation, and periodic banking-access hurdles have kept mainstream finance at arm’s length.

RBI’s tokenisation push offers a bridge. By demonstrating that tokenised assets can run on compliant rails with clear rules and traceability, it builds trust in the underlying technology. If tokenised CDs function smoothly at scale—settling quickly, integrating with bank systems, and passing audits—the perception of blockchain shifts from speculative to infrastructural. That credibility can spill over into adjacent use cases.

Near-term pathways and adjacent assets

• Scaling from CDs to other money-market instruments: Once CD tokenisation proves robust, instruments such as commercial paper are natural next candidates. Each step expands the regulated tokenisation perimeter and standardises processes for issuance, trading, and settlement.
• Longer-term tokenisation of real-world assets: Equities and real estate may require additional legal and regulatory frameworks, but the potential is compelling—fractional ownership, 24/7 markets, and automated, atomic settlement.
• Retail-facing possibilities: While the current pilots are wholesale-focused, the design principles could inform tokenised mutual funds, tokenised deposits, and compliant stable-value instruments, subject to RBI and SEBI policy. Combined with India’s real-time payments rails, the line between digital money and digital assets could become increasingly seamless—under strict regulatory guardrails.

Opportunities for the Web3 ecosystem

Regulated tokenised markets will need secure custody, smart contract assurance, interoperability frameworks, and high-quality audit and analytics tooling—areas where Indian startups are active. As standards mature, innovations developed in the open Web3 world can be adapted “inside the fence,” encouraging collaboration between banks, infrastructure providers, and developers. This migration of know-how can catalyse a domestic stack for compliant tokenised finance, from issuance to settlement and reporting.

Critical enablers and guardrails

• Legal and tax clarity: Clear definitions around what constitutes a security token, how KYC/AML applies across tokenised markets, investor-protection norms, and how taxation treats on-chain lifecycle events are foundational. Interoperability standards will also matter if multiple institutions operate distinct permissioned ledgers.
• Cybersecurity and operational resilience: Tokenised financial plumbing must meet bank-grade security and monitoring. Rigorous audits, segregation of duties, incident response playbooks, and continuous testing are essential to mitigate smart contract and key-management risks.
• Interoperability and standards: To avoid fragmented liquidity and operational silos, common data models, messaging standards, and cross-ledger settlement protocols will be crucial. Neutral utilities or industry consortia could help coordinate these efforts.
• Education and change management: Institutions on legacy stacks may be cautious, and many consumers still conflate blockchain with speculative tokens. Clear communication, transparent risk disclosures, and practical showcases of value (faster settlement, fewer breaks, better transparency) will ease adoption.

A compliance-first blueprint, not a crypto free-for-all

It bears emphasizing that tokenisation within RBI’s framework is not an endorsement of unregulated cryptocurrencies. Rather, it is a pragmatic exploration of distributed-ledger technology for regulated financial assets. The aim is to harness programmability, transparency, and efficiency while retaining the accountability and consumer protections embedded in India’s financial laws.

The road ahead

If executed thoughtfully, the tokenisation pilot can do more than modernize back-office workflows. It can provide a scalable pattern for digitizing real-world assets, streamline capital markets, and seed a domestic innovation loop where regulated finance and blockchain technology reinforce each other.

India already operates one of the world’s most active real-time payments systems, processing tens of billions of transactions each month. As tokenised instruments mature alongside these rails, the country can progress toward a unified digital financial stack—where money and assets interoperate, settlements compress from days to seconds, and compliance is embedded by design.

The future of crypto in India may not be defined by unregulated coins, but by trustworthy, programmable assets built within strong policy guardrails. RBI’s tokenisation push could be the catalyst that aligns technological ambition with regulatory confidence—turning blockchain from a speculative storyline into the backbone of India’s next-generation financial infrastructure.