INDIA Trends and Developments Contributed by: Shilpa Mankar Ahluwalia, Purva Anand and Ansh Jain, Shardul Amarchand Mangaldas & Co
Shardul Amarchand Mangaldas & Co Amarchand Towers, 216 Okhla Phase III Okhla Industrial Estate Phase III New Delhi Delhi 110020 India Tel: +91 11 4060 6060 Email: connect@amsshardul.com Web: www.amsshardul.com
Asset Tokenisation and Central Bank Digital Currency Asset tokenisation is one of the fastest-growing fin - tech use cases in India and is drawing close atten - tion from users and regulators. In simple terms, asset tokenisation means turning a financial asset into a digital record on a governed ledger so it can be issued, held, transferred and settled using embedded programs. The main technical gain is quicker settle - ment with fewer reconciliations. The key legal ques - tion surrounding its implementation is whether rights, obligations and title can be enforced with the same certainty as in the case of a real world exchange. In India, the regulatory approach has moved in the last 12 to 24 months from concept notes to live trials by regulators. In October 2025, the Reserve Bank of India (RBI) launched a pilot to tokenise certificates of deposit (CDs) and settle them on the wholesale Central Bank Digital Currency (CBDC) (often called e₹-W), which the RBI introduced in 2022. The pilot involves a small set of banks and operates within interbank markets. CDs were chosen on purpose: they are short-dated, high- volume and operationally simple. This lets authorities and participants test issuance, transfer and settlement end-to-end without the legal or operational complexity of bespoke products. Officials of the RBI have also said that other money market instruments, including commercial paper, are being considered after this first phase.
Alongside the pilot, the RBI announced a “Unified Markets Interface” (UMI). UMI is described as next- generation market infrastructure with two main pillars. First, it enables tokenisation of financial assets under a common rulebook. Secondly, it uses wholesale CBDC for settlement, so the asset and cash transfer legs are completed synchronously and immediately in cen - tral bank money (termed as atomic settlement). This makes tokenisation part of core market infrastructure run by the regulator, not a separate private system. On the other hand, the securities regulator in India – the Securities and Exchange Board of India (SEBI) – has taken a technology-neutral approach to asset tokenisation. If a digital asset behaves akin to and has the characteristics of securities, SEBI is likely to regu - late it as a security, irrespective of whether its records are in a traditional depository or on a tokenised ledger. The practical effect is better disclosure, governance and post-trade transparency, so digital units fit into existing investor-protection rules. A concrete step that supports tokenisation is SEBI’s reform of the real estate investment trust framework. Real estate has emerged as one of the most rapidly growing asset tokenisation use cases in India, which led to a proliferation of unregulated fractional own - ership platforms. In response, SEBI treated such platforms as akin to REIT exposure and modified the framework to create small and medium REITs, bring - ing fractional ownership platforms within the REIT structure with mandatory registration and listing. By formalising fractional real-estate exposure in a super -
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