{
  "id": 12583582,
  "title": "From UPI to tokenised assets: Is India building the next generation of financial infrastructure?",
  "url": "https://urgent.news/2026/10/07/from-upi-to-tokenised-assets-is-india-building-the-next-generation-of",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-07T08:15:12.000Z",
  "source": {
    "name": "YourStory",
    "slug": "yourstory",
    "url": "https://yourstory.com/2026/10/from-upi-to-tokenised-assets-india-building-next-generation-financial-infrastructure"
  },
  "original_language": "en",
  "account": "India's financial landscape is undergoing a transformative shift, moving from traditional systems to a new era of digital asset management. This evolution is being driven by the success of UPI, which enabled instant, interoperable payments across a vast network of banks and fintechs. Building on this foundation, the next phase could involve tokenising assets, creating digital representations that could revolutionize how financial instruments are bought, sold, and settled.\n\nAt the heart of this transformation is the concept of tokenisation, which involves representing assets like bonds, funds, receivables, and real estate in a digital format on a secure, programmable infrastructure. This approach aims not just to digitise existing assets, but to redefine the legal framework surrounding ownership, transfers, and compliance. India is already making strides in this area, with the Reserve Bank exploring tokenised versions of money through the e-rupee, and the RBI conceptualising a Unified Markets Interface designed to tokenise financial assets and settlements through wholesale central bank digital currency.\n\nThe securities market is also embracing this trend, with SEBI's recent launch of the \"Demat 2.0\" pilot for tokenised corporate bonds. This initiative moves the conversation from theoretical experimentation to practical testing within a regulated environment. The potential benefits are particularly significant in the fixed-income sector, where bonds' defined cash flows, maturity dates, and clear ownership records make them ideal candidates for digital issuance and settlement. Tokenisation could enable finer-grained ownership, increased liquidity, and automated lifecycle events, thereby reducing friction and enhancing market efficiency.\n\nHowever, the journey to fully realise the potential of tokenised assets is fraught with challenges. While the technology to create tokens is relatively straightforward, building a robust, trusted market for these digital assets requires careful consideration of several key factors. First and foremost, there is a need for clear legal and regulatory frameworks that define the rights and obligations associated with each token, establish ownership records, and outline procedures for handling defaults, insolvencies, and disputes. These legal structures must be robust enough to withstand court scrutiny, ensuring that token ownership holds up under legal scrutiny.\n\nInteroperability is another crucial element. For tokenised assets to truly make a difference, they must be seamlessly integrated into existing financial infrastructures. This means developing common standards and protocols that allow different participants—wallets, custodians, registries, exchanges, and regulatory bodies—to communicate and transact with each other effortlessly. Unlike UPI, which achieved widespread adoption by allowing different networks to connect through shared standards, the tokenised asset market will require a more global approach. Standardising interoperability across borders will be essential to unlock the full potential of this new financial infrastructure.\n\nEqually important is institutional trust. Tokenisation fundamentally alters the operational dynamics of asset management, requiring all stakeholders—issuers, investors, custodians, depositories, exchanges, banks, and regulators—to trust a shared set of records and controls. This necessitates addressing cybersecurity, key management, identity verification, recovery mechanisms, and auditability. India's existing digital public infrastructure, which has already demonstrated the ability to create unified rails for payments and data sharing, could serve as a valuable foundation for building secure, regulated financial ecosystems.\n\nRather than viewing tokenisation as a replacement for traditional financial systems, India should aim to create a programmable infrastructure ecosystem that leverages the best aspects of both worlds. By combining the trust and regulatory safeguards of established financial markets with the flexibility and programmability of digital assets, India could position itself at the forefront of the next generation of financial infrastructure. This approach has the potential to redefine how assets are created, traded, and managed, paving the way for more efficient, accessible, and inclusive financial systems that can compete on a global scale.",
  "summary": "The Reserve Bank has been exploring tokenised forms of money through the e-rupee and wholesale applications of central bank digital currency.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}