Can India build a ‘UPI’ for your cows and your gold?

Snigdha Sharma (0:00)

Hello, today's episode is a little bit different from our usual programming, because I am reading aloud a newsletter edition by my colleague, The Ken reporter, Suprita Anupam.

Think about how you buy gold or land today. There's paperwork, there's middlemen, there's waiting, there's days, sometimes months. Now, imagine owning a piece of it the way that you would own money on your UPI app, where it moves in seconds.

This is the big idea behind something that is called tokenization. And at a big finance event in Mumbai last month, it was all anybody could talk about. The RBI, the market's regulator, even Nandan Nelekani, the man behind Aadhaar, were talking about it. But this whole plan depends on the RBI's digital version of the rupee. And so far, very few people have actually been using it. Indian banks have also bet big on this kind of technology before, and it flopped. So is this the next UPI, or is this another start?

Welcome to Daybreak, a business podcast from The Ken. I'm your host, Nigdha Sharma, and I don't chase the news cycle. Instead, every day of the week, my colleague Rachel Varghese and I will come to you with one business story that's worth understanding and worth your time. Today is Tuesday, the 29th of September.

The Global Fintech Fest, or GFF, just concluded on the 11th of September. Everybody, from the Securities and Exchange Board of India, or SEBI, and the RBI, the Reserve Bank of India, and state governments, and the likes of Nandan Nilekani, were gaga about one thing. Tokenization.

At the 2025 GFF, the RBI launched the Unified Markets Interface, which is UMI, introducing the idea of tokenizing financial assets using Central Bank Digital Currency or CBDC. At this year's edition, the major highlight was tokenizing physical assets using CBDCs. It is seen as a breakthrough because until now, physical assets could not easily be transacted using money. Tokenizing them with proper descriptors brings them on to the same digital footing. Nirit Singh, the co-founder of Zols, which builds blockchain-based financial infrastructure and has worked with Sebi on a framework for tokenization in Indian capital markets and is now exploring tokenized cross-border trade finance instruments from Gift City, tells The Ken, and I'm quoting, When both the asset and the money are on chain, it can enable more efficient asset management, programmable transactions, and real-time settlement.

This also opens the door to tokenizing real-world assets and financial instruments, potentially bringing greater access and liquidity to traditionally illiquid assets. We see trade finance instruments as one of the next areas where tokenization can have a meaningful impact. There is much hype now. Speaking at the GFF, Maharashtra Chief Minister Devendra Fadnavis announced plans to tokenize the state land through the Delta Act, enabling a legal framework for blockchain-based real-world assets or RWA. The state is working with experts from SEBI, BSE, NSE, the technology sector, law and academia, according to Fadnavis. The tokenization buzz has also given another lifeline to CBD seeds, as the E-rupee will be crucial for tokenization. It is worth noting that despite 4 years in operation, the value of wholesale CBDC or CBDCW stood at nil as of March 31, 2026 Meanwhile, retail CBDC, which is CBDCR notes in circulation, declined from Rs 1,016 crore on the 31st of March, financial year 2025 to Rs 771 crore on the 31st of March, 2026

Here is a quote from the annual report of FY2026 by RBI on why CBDCW stood at nil. It says, CBDCW is being used for settling large value transactions among financial institutions. Owing to the auto redemption feature exercised by the participating banks and non-banks, balances in CBDCW are redeemed back to the underlying current account at the end of the day. And therefore, the balances need not be construed to reflect the transaction volumes and values. As part of DMAT 2.0, which SEBI and the RBI jointly unveiled at GFF 2026, the bonds market are being tokenized against CBDCs through the RBI's UMI. Traditionally, bond settlement happens on a T plus one and T plus two, and involves substantial manual reconciliation. Tokenization, combined with CBDC, allows true delivery versus payment. Instantaneous settlement. Dilip Janoy, the chairman of Bharat Web 3 Association and former Secretary General of Vicky, explained, and I'm quoting, Tokenization, combined with CBDC, allows true delivery versus payment. Instantaneous settlement. Instant settlement turns illiquid holdings into active collateral, allowing investors to pledge and release assets in minutes rather than days.

After the announcement, three issuers, REC, L&T, IIFL, tested it in SEBI's regulatory sandbox. REC, which is a Maharatna CPSC, issued 500 crore rupees worth of bonds. Intra-giant L&T released another 500 crore rupees, while IIFL issued 25 crore rupees. For all three, as per the SEBI press release, the pain, allotment and listing happened on the same day that the cash leg moved in RBI's wholesale e-rupee. While India is the first country where a corporate bond has been issued on a distributed ledger, sovereign bonds have been issued on chain earlier as well. For instance, the European Investment Bank issued 100 million euros digital bond back in 2022 Hong Kong issued about 10 billion Hong Kong dollars of digital green bonds in November 2025 with tokenized central bank money as a settlement option. Globally, tokenized real world assets are exploding. Speaking at the GFF, Nilekani said, there is about 600 billion dollars worth of tokens today. Most of them are like stable coins, but the expectation is that it will be around 19 trillion dollars of assets on tokens in the next 7 to 8 years.