India is moving beyond digital payments as policymakers and regulators test tokenization across bonds, land and public infrastructure.
At the Global Fintech Fest 2026 in Mumbai, Prime Minister Narendra Modi called on the financial sector to use technologies such as tokenization, agentic AI and quantum computing for practical economic use.
He said the challenge was to ‘turn these possibilities into real impact.’ The push comes as India starts testing regulated blockchain-based systems for real-world assets.
India Tests Tokenization Beyond Digital Payments
Tokenization converts ownership or economic rights linked to an asset into digital units that can be recorded and transferred on a distributed ledger. The model can support fractional ownership and faster settlement while keeping the underlying asset within existing legal and regulatory systems. For India, the approach could extend digital finance from payments into bonds, commodities, property and infrastructure.
A major test began on September 7 when state-owned REC raised ₹500 crore through India’s first pilot issue of tokenized corporate bonds under SEBI’s Regulatory Sandbox Framework.
The bonds carried a 7.30% coupon and were settled through a system that uses tokenized securities and the Reserve Bank of India’s wholesale digital rupee. REC’s deal was followed by issuances from Larsen & Toubro and IIFL Finance, taking the early pilot total to ₹1,025 crore.
Maharashtra Explores Tokenizing State Infrastructure
Maharashtra is also examining how tokenization could help fund public infrastructure. Praveen Pardeshi, chief executive of the Maharashtra Institution for Transformation and economic adviser to the chief minister, said the state is working on a policy that could bring government-owned assets under tokenization. He pointed to electricity transmission infrastructure as one possible area.
Pardeshi said a portion of transmission assets could be tokenized so investors receive part of the income generated by those assets. The capital raised could then fund additional transmission lines and energy storage projects.
He said, “Tokenization doesn’t mean privatization wholesale,” while describing the plan as a way to bring more citizens into public asset financing. The proposal remains at the policy stage, and its final structure has not been announced.
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DELTA Act Could Set Rules for Tokenized Land
Maharashtra is separately drafting the Maharashtra Digitisation and Exchange of Land Token Asset, or DELTA, Act. Chief Minister Devendra Fadnavis has said the proposed framework would cover blockchain-based tokenization of land and other immovable assets. The draft has not yet become law, and details on ownership rights, trading, custody and investor eligibility are still being developed.
India already has regulated digital records for several financial and physical assets. Tokenization could connect such records with digital settlement systems, but regulators still need clear rules on what each token represents and how investors can enforce their rights.
The RBI and SEBI’s Demat 2.0 pilot gives regulators a controlled environment to test tokenized securities, digital settlement and smart contracts before wider use.
The current projects show India’s tokenization drive moving from policy discussions to regulated pilots. UPI digitized payments at national scale; the new policy focus is on whether digital infrastructure can also support ownership, transfer and financing of real-world assets. Wider adoption will depend on legal rules, interoperable systems, custody standards and consumer protection as regulators and institutions test the model.
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