India has spent the past decade making money move faster. Now it wants to do the same with assets like bonds, gold and property. On 10 September, the Reserve Bank of India (RBI) and Securities and Exchange Board of India launched Demat 2.0, a pilot project that has already seen REC Ltd, Larsen & Toubro and IIFL Finance issue tokenized bonds.
Tokenization, as with cryptocurrencies, creates digital assets that can be transferred ‘atomically’: an asset changes hands in the same step as its payment. Such bonds are tracked on a tightly shared online ledger, or blockchain, with institutional trades done in the wholesale e-rupee—India’s central bank digital currency (CBDC). The retail e-rupee will eventually enable wider participation.
Tokenized assets promise to make their markets faster, cheaper and safer. ‘Atomic’ or indivisible deals reduce settlement risk, while smart contracts can automate interest payments, corporate plans and compliance.
Early Bank for International Settlements (BIS) research found tokenized bonds had lower bid-ask spreads than comparable conventional bonds, which speaks of trading efficiency gains. Fractional ownership could also widen access to high-value assets if market liquidity and rules of custody (and trading) allow it.
The enabling technology was thrust into the spotlight by crypto, which uses open ledgers, an idea we embraced for its broader value. From our national blockchain strategy in 2021 to the National Blockchain Framework (NBF) of 2024, that embrace has come a long way. Government data says more than 340 million documents had been verified on the NBF by 21 October 2025.
Many other countries are also testing tokenized securities with digital-money settlement. Once both currency and deals can safely be programmed, such asset markets could evolve rapidly.
To go beyond bonds, RBI is looking at gold tokenization, while Maharashtra proposes a legal framework to convert land and other immovable assets into tokens.
Nandan Nilekani of Aadhaar fame has advocated a global ‘finternet’ for tokenized assets. India could leverage its digital public infrastructure, the NBF and e-rupee included, to plug into markets abroad.
Demat 2.0 is designed for a closely regulated shift. Unlike crypto ledgers, its official blockchain is not decentralized; it is supervised, so as to offer the security of trusted institutions.
That said, bonds are easy to tokenize: every bond already has a recognized issuer, ownership record and regulated settlement system. Gold is harder: someone must establish that every token corresponds to actual gold, securely held and of the right purity. Land is harder still. A token cannot, by itself, establish title, resolve an inheritance dispute, reveal an encumbrance or settle a boundary dispute.
There are other challenges. To attract traders, Demat 2.0 must show gains of time and cost efficiency. India must also close any space for legal ambiguity. Tokens are useful only if they are linked securely to their underlying assets as recognized by law.
For tokenization to succeed, not only must ledgers stay hack-proof, all registries, custodians, regulators, platforms, smart contracts and courts behind tokens must work in tandem to minimize ownership risk.
While a start has been made, India should focus on making ownership more reliable, settlement cheaper, financing easier and markets more liquid. Putting assets on a ledger under regulatory oversight is the easy part. Making assets move with the ease with which money does is what will matter.