Reserve Bank of India (RBI) has launched a pilot for deposit tokenization on Wednesday, October 8, 2025.

The pilot finds its initial application in tokenization of Certificates of Deposit (CDs), which are bank-issued money market instruments of short tenure that are negotiable. The aim is to digitally represent these financial products on a blockchain.

The pilot focuses on institutional/wholesale business (bank-to-bank transactions) and not on retail consumers.

The RBI has also shown it is testing tokenization with other money market products, such as commercial papers (CPs). This program is derived from India’s Central Bank Digital Currency (CBDC) wholesale segment, referred to as e₹-W.

The Reserve Bank of India (RBI) is using a permissioned, in-house-developed Distributed Ledger Technology (DLT) platform for its Central Bank Digital Currency (CBDC) pilots, including the wholesale part (e₹-W) and the deposit tokenization initiative.

Though the RBI will not disclose the specific commercial or open-source blockchain infrastructure (like Hyperledger Fabric or Quorum) that it has picked up, some details are known:

• The platform is a permissioned DLT, meaning access and validation are restricted to authorized participants (the RBI and participating banks), ensuring centralized control, which is essential for a central bank-issued currency.
• The RBI’s efforts, especially in the context of a broader National Blockchain Framework, involve utilizing Linux Foundation projects to build its infrastructure.
• The emphasis is on building a secure, scalable, and interoperable system. The technology is designed to leverage DLT’s benefits (faster settlement, lower risk) while maintaining the sovereign guarantee and regulatory oversight of the central bank.

The wholesale CBDC as the underlying ensures that the tokenized deposits are anchored to a central counterparty (the RBI), providing the finality and integrity of central bank money for settlements.

This should significantly improve efficiency, leading to faster settlement, lower cost of transactions, and greater transparency in interbank financial transactions.

The RBI is collaborating with “a few banks” on the project, although the identity of all the participating institutions has not been made known yet.

The pilot has commenced and will be extended for some months. RBI plans to publish an in-depth assessment report on the findings sometime early 2026.

So far pilot program had been launched only, so no public information is available as yet about any special operating or technical issues being encountered in the pilot itself.

But RBI officials have been candid about the regulatory challenges and risks they are looking to manage during this pilot phase.

RBI’s Chief General Manager Suvendu Pati noted that the central bank’s primary concern is to ensure that the integrity and enforceability of the tokenized assets are fully established and maintained.

He explained that while the risks to asset tokenization are generally in check, they need to be actively controlled through regulatory protection. The key areas of examination are:

• Defining clear rules for the ownership, transfer, and redemption of the digital tokens.
• Ensuring that the tokenization process does not destabilise the banking system or create imbalances in bank reserves.
• Testing how the distributed ledger technology (blockchain) performs in terms of speed and reliability for large-scale institutional transfers.

In one way, this initiative is a major milestone for the RBI strategy to improve India’s financial ecosystem through the adoption of blockchain technology and digital tokens in its controlled CBDC framework securely.