Daybreak - Can India build a ‘UPI’ for your cows and your gold?

Episode Date: September 28, 2026

Earlier this month, at the Global Fintech Fest in Mumbai, India's regulators and industry leaders rallied around one idea: tokenisation, which turns assets like bonds, gold and land into digital units that can be bought, sold and settled in seconds. Some of it is already underway, with three companies recently raising over Rs 1,000 crore through bonds that settled the same day.But the plan leans heavily on the RBI's digital rupee, which has seen little use four years after launch. And Indian banks have bet on blockchain before, without much to show for it.In this edition, Suprita Anupam examines whether tokenisation can do for financial assets what UPI did for payments.This is a read aloud of a newsletter edition of Ka Ching, by Snigdha Sharma on Daybreak by The Ken.📖 Read the full story on The Ken: Can India build a ‘UPI’ for your cows and your gold?Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hello, today's episode is a little bit different from our usual programming because I am reading aloud a newsletter edition by my colleague the Ken reporter, Soprit Anapam. Think about how you buy gold or land today. There's paperwork, there's middleman, there's waiting, there's days, sometimes months. Now, imagine owning a piece of it the way that you would own money on your UPI app, where it moves in seconds. This is the big idea behind something that is called tokenization. And at a big finance event in Mumbai last month, it was all anybody could talk about.

The RBI, the market's regulator, even Nanda Nelekani, the man behind Aadhar, were talking about it. But this whole plan depends on the RBI's digital version of the rupee. And so far, very few people have actually. been using it. Indian banks have also bet big on this kind of technology before and it flopped. So is this the next UPI or is this another false start? Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nika Sharma, and I don't chase the new cycle. Instead, every day of the week, my colleague Rachel Vargheese and I will come to you with one business story that's worth understanding and worth your time.

Today is Tuesday, the 29th of September. The Global Fintech Fest, or GFF, just concluded on the 11th of September. Everybody from the Securities and Exchange Board of India or Sebi and the RBI, the Reserve Bank of India and state governments, and the likes of Nanda Nalikani, were Gaga about one thing. tokenization. At the 2025 GFF, the RBII launched the unified DILACANI launched the unified markets interface, which is UMI, introducing the idea of tokenizing financial assets using central bank digital currency or CBDC. At this year's edition, the major highlight was

tokenizing physical assets using CBDCs. It is seen as a breakthrough because, until now, physical assets could not easily be transacted using money. Tokenizing them with proper descriptors brings them onto the same digital footing. Neut Singh, the co-founder of Zoltz, which builds blockchain-based financial infrastructure and has worked with Sebi on a framework for tokenization in Indian capital markets and is now exploring tokenized cross-border trade finance instruments from Gift City tells Sakem, and I'm quoting,

when both the asset and the money are on chain, it can enable more efficient asset management, programmable transit, actions and real-time settlement. This also opens the door to tokenizing real-world assets and financial instruments, potentially bringing greater access and liquidity to traditionally illiquid assets. We see trade finance instruments as one of the next areas where tokenization can have a meaningful impact. There is much hype now.

Speaking at the GFF, Maharashtra, Chief Minister, Minister, Davyendra Fadnavis, announced plans to tokenize the state land through the Delta Act, enabling a legal framework for blockchain-based real-world assets, or RWA. The state is working with experts from SEB, BSE, NSA, the technology sector, law and academia, according to Fadnaviz. The tokenization buzz has also given another lifeline to CBDCs, as the E-Rupee will be crucial for tokenization. It is worth noting that, despite four years in operation, the value of wholesale CBDC or CBDCW stood at nil as of March 31st, 26.

Meanwhile, retail CBDC, which is CBDCR, notes in circulation declined from 1,016 crore rupees on the 31st of March, financial year 2025 to 771 crore rupees on the 31st of March, 26. is a quote from the annual report of FY 2026 by RBI on why CBDCW stood at nil. It says CBDCW is being used for settling large value transactions among financial institutions. Owing to the auto-redemption feature exercised by the participating banks and non-banks, balances in CBDCW are redeemed back to the underlying current account at the end of the day and therefore the balances need not be construed to reflect the transaction volumes and values. As part of Demat 2.0, which Sebi and the RBI jointly unveiled at GFF 2026, the bond's market are being tokenized against CBDCs through the RBI's UMI.

Traditionally, bond settlement happens on a T-plus-1 and T-plus-2 and involves substantial manual reconciliation. tokenization combined with CBDC allows true delivery versus payment. Instantaneous settlement. Dilipchanoind, or chairman of Bharatweb 3 Association and former Secretary General of Fiki explained and I'm quoting, tokenization combined with CBDC allows true delivery versus payment. Instantaneous settlement.

Instant settlement turns illiquid holdings into active collateral allowing investors to pledge and release assets in minutes rather than days. After the announcement, three issuers, REC, L&T, IAFL tested it in Sebi's regulatory sandbox. REC, which is a Maharatna CPSC, issued 500 crore rupees worth of bonds. Infra-giant L&T released another 500 crore rupees while IAFL issued 25. for all three, as per the Sebi press release, the pain, allotment and listing happened on the same day that the cash leg moved in RBI's wholesale E-Rupee. While India is the first country where a corporate bond has been issued on a distributed ledger, sovereign bonds have been issued on chain

earlier as well. For instance, the European Investment Bank issued 100 million euros digital bond back in 2022. Hong Kong issued about 10 billion Hong Kong dollars of digital green bonds in November 2025 with tokenized central bank money as a settlement option. Globally, tokenized real world assets are exploding. Speaking at the GFF, Nilakani said, there is about $600 billion worth of tokens today. Most of them are like stable coins, but the expectation is that it,

will be around $19 trillion of assets on tokens in the next 7 to 8 years. According to Chenoy, tokenized real-world assets excluding stable coins have grown from $13.6 billion to $31.5 billion in a year across the four largest classes, with tokenized equities alone rising from $61 million to $2.47 billion. NASDAQ just invested $100 million in Payward, the parent company of Crypto Exchange Cracken, at a $21 billion valuation. The goal? To distribute tokenized NASDAQ listed stocks that carry the same voting rights as regular shares. As Arjun Sati, the co-CEO of Payward puts it, the next phase is planned to advance NASDAQ equity tokens onto rails that do not close. which shareholders' rights intact.

While Zolz has been working with Sebi on tokenizing equities, the RBI has already floated tokenizing commodities, particularly gold. P. Vasudevin, the executive director of the RBI, said at the GFF 2026, and I'm quoting, we were looking at gold tokenization as one more avatar that is being explored. There are challenges in the existing modes, but that can be. fulfilled by tokenization. At this year's GFF, former UIDAI chairman Nandal Nealakani, showcased how tokenization could help register farm collateral for credit. Cows would be quote-unquote muzzle captured, which would act as biometric markers that the farmer can later

upload on an app to register for a loan. A loan can then be approved without a loan officer ever visiting the farm. But this projection of a future is not as rosy as the past. Back in 2017 and 18, banks invested heavily in blockchain. It did not work. Mostly because the applications weren't demand-driven and awareness of blockchain was low, while crypto crimes on public blockchains were high. Things have evolved since then. Additionally, just as the RBI launched CBDC to counter cryptocurrencies, it is now mulling tokenizing gold to counter digital gold demands. Having tested certificates of deposit and commercial paper on its UMI, the central bank could add gold tokenization to the platform.

Nilikani has been immensely active on the second front. Sebi has repeatedly warned that digital gold is not a regulated product. The RBI now wants to offer a regulated alternative. The trouble is the counterparty and the operational risks that Seby's circular pointed to. What if a major platform defaults? Is digital gold really backed by physical gold, like in the case of gold ETFs? Who certifies this? Or should investors just take the platform's word on this? Are there enough checks and balances in how digital gold platforms runs on their ops? There are many ifs and buts and much at stake going by Sebi's shopmissive.

The subtext of Sebi's circular, millions of Indians investing in digital gold with no former regulatory safeguards is asking for trouble sooner or later. And if and when trouble comes, don't come to Seby. UPI achieved a remarkable digital feat. But can UMI now do the same for capital markets and financial assets? Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of a subscriber-only offerings and a full subscription unlocks daily long-form feature stories, newsletters and podcasts. Head to the Ken.com and click on the red subscribe button on the top of the website.

Today's episode was hosted and produced by Snickda Sharma and edited by Arna Prakash.