India Tightens Focus On Regulated Digital Asset Infrastructure With GIFT City, Tokenisation And CBDC Push
India is steadily tightening its focus on regulated digital asset infrastructure, with policy discussions increasingly centring on tokenisation, stablecoins and the role of GIFT City as a controlled sandbox for blockchain-based finance, according to people familiar with the matter and regulatory developments. While India has not authorised private stablecoins, officials and industry stakeholders are engaged in structured discussions on whether limited, regulated INR-backed tokens could eventually be permitted for specific use cases such as cross-border payments, trade settlement and financial market efficiency, sources said.
The Reserve Bank of India (RBI) continues to prioritise its central bank digital currency (CBDC), the digital rupee, as the primary sovereign digital money framework. The RBI has expanded pilot programmes across retail and wholesale segments, with a focus on programmable payments, subsidy delivery and interbank settlement. However, industry participants argue that CBDC alone may not address broader innovation demands in programmable finance or global liquidity flows. Several fintech firms and financial institutions are pushing for a parallel framework that could allow regulated private INR-denominated tokens under strict oversight.
Gujarat International Finance Tec-City (GIFT City), India's International Financial Services Centre, is emerging as the primary experimental zone for digital asset innovation. Regulators are exploring frameworks for tokenised bonds, blockchain-based fund units and digital settlement infrastructure within the IFSC structure, sources said. Market participants say GIFT City is increasingly being positioned as India's "controlled sandbox" for Web3-linked financial products, enabling institutional experimentation without exposing the broader domestic financial system to crypto volatility.
In parallel, discussions around real-world asset (RWA) tokenisation are gaining traction, particularly in corporate bonds and fund management. Asset managers are evaluating the potential for fractional ownership, faster settlement cycles and on-chain administration of regulated securities, aligning with global trends in digital capital markets. The Securities and Exchange Board of India (SEBI) is also working on broader digital securities reforms that could indirectly support tokenised instruments, though no formal framework for blockchain-based securities trading has been introduced yet.
Cross-border payments remain a key policy driver. India, the world's largest recipient of remittances, is exploring whether tokenised settlement rails could reduce transaction costs and improve speed for overseas transfers, particularly in major corridors such as the Gulf, United States and Europe. The evolving approach suggests India is not embracing open crypto markets, but is instead building a tightly regulated digital finance stack combining CBDC infrastructure, sandbox-based innovation and controlled tokenisation pilots.