Deposit Tokens and Asset Tokenisation | 14 Apr 2026

Source: BL

As global finance rapidly shifts toward programmable, always-on settlement systems, discussions have emerged on how India can safely modernize its banking sector, highlighting deposit tokens and real-world asset tokenisation as the next evolutionary steps beyond its successful digital public infrastructure (like UPI).

• Deposit Tokens: These are digital representations of bank deposits issued on permissioned blockchain networks, fully backed by traditional deposits and subject to regulation, enabling real-time settlement, programmability, and no additional credit risk.
• Advantages over Unregulated Crypto: Unlike private cryptocurrencies, deposit tokens are direct claims on a bank’s balance sheet. 
  • They extend the regulated banking framework into a programmable digital layer, enabling near-instant settlement, atomic delivery versus payment (DvP), and automated reconciliation without introducing new credit or liquidity risks.
• Transforming Banking Operations: For Indian banks, the adoption of deposit tokens means interbank settlements, treasury operations, and large-value corporate payments can transition from delayed batch-based processes to real-time, instantaneous rails. 
  • It also promises to make cross-border transactions faster, cheaper, and more transparent.
• Real-World Asset Tokenisation: It involves converting real-world assets like real estate, gold, and infrastructure into digital tokens.
  • It addresses India's liquidity constraints by allowing traditionally illiquid assets to be fractionalised, transferred, and used efficiently as collateral.
• Synergy for Market Efficiency: When tokenised assets are paired with bank-issued deposit tokens, trades can settle instantly in regulated digital money.
  • This drastically reduces counterparty risk, lowers operational costs, and broadens market participation under clear regulatory guardrails.
• Regulatory Roadblocks: Currently, many tokenisation initiatives are confined to regulatory sandboxes. 
  • To scale this, India urgently needs regulatory clarity around foreign exchange (Forex) laws, Anti-Money Laundering (AML), KYC norms, and cross-jurisdictional compliance for blockchain-based instruments.
• Strategic Imperative for India: By proactively establishing frameworks for regulated digital money, especially for trade finance and institutional settlements, India has the strategic opportunity to shape global standards. 
  • Delaying this transition risks capital and innovation migrating to other, more technologically integrated jurisdictions.