The Reserve Bank of India (RBI) will launch a pilot program on deposit tokenization on Wednesday, marking a major step in the country’s push toward digitizing financial assets, an official said.
Digital tokenization involves creating blockchain-based representations of traditional assets such as deposits, bonds, or stocks. These tokens can make transactions faster, cheaper, and more secure by enabling real-time settlement and reducing intermediaries.
The RBI will use the wholesale leg of its central bank digital currency (CBDC) — the digital rupee — as the underlying layer for this pilot, said Suvendu Pati, the RBI’s chief general manager, at an event in Mumbai on Tuesday. The central bank is collaborating with “a few banks” for the initiative, he added.
Digital tokens
Under deposit tokenization, bank deposits are converted into digital tokens that can be easily transferred or settled across different systems. Each token represents a unit of deposit, maintaining full parity and redeemability with the underlying funds.
Pati said the pilot builds on the RBI’s earlier efforts to tokenize assets such as government securities and certificates of deposit. “We have picked up every use case on certification of deposits for tokenization of assets. It’s a short-term instrument issued by banks,” Pati said on the sidelines of the Global Fintech Fest (GFF) on October 7.
According to Pati, the initiative represents a key milestone in the RBI’s strategy to modernize India’s financial infrastructure through blockchain technology. He emphasized that tokenizing CBDCs and other financial instruments could deliver major efficiency gains for the banking sector.
