What Are Tokenised Deposits — and Why Are Banks Talking About Them?
When you transfer money through UPI, it moves as a record in your bank’s database — not as a digital object. Tokenised deposits change that. They convert regular bank balances into programmable, blockchain-based “tokens” that represent real money held in a regulated account. Each token equals one rupee, backed by a commercial bank, not the RBI.
Think of it as your savings account getting a digital twin. Through Rbi Tokenised Deposit Pilot, these tokens can move instantly between banks, wallets, or even smart contracts — all while staying inside the regulated banking perimeter. The goal is to make money behave like data: traceable, fast, and programmable.
The Reserve Bank of India (RBI) and a few major banks like HDFC, ICICI, and Axis are exploring pilots for tokenised deposits under its innovation sandbox. The concept builds on global research by the Bank for International Settlements (BIS) and aligns with India’s push for digital public infrastructure (DPI).
Insight: Tokenised deposits are not a new currency — they’re simply a smarter, more secure version of the money you already have in your bank.How Tokenised Deposits Could Transform UPI and CBDC
India’s payments ecosystem — especially UPI — is already real-time. So why tokenise? The answer lies in programmability. With tokenised deposits, payments can carry built-in rules — like releasing funds only when a shipment is confirmed or splitting a bill automatically across multiple accounts.
Through Upi And Digital Rupee Integration, RBI aims to test interoperability between tokenised deposits and the Digital Rupee (CBDC). Imagine UPI payments where the backend settlement happens in tokenised form — offering the same speed but with blockchain-level traceability and offline resilience.
Key differences between CBDC and tokenised deposits:
- Issuer: CBDC is issued by RBI; tokenised deposits are issued by commercial banks.
- Nature: CBDC is a liability of RBI; tokenised deposits are liabilities of banks.
- Infrastructure: CBDC runs on RBI’s digital rupee network; tokenised deposits can use bank-approved distributed ledgers.
- Use Case: CBDC supports retail and wholesale users; tokenised deposits focus on programmable, B2B, or interbank applications.
By 2026, these systems could merge — enabling “token bridges” where CBDC and tokenised bank money flow seamlessly through UPI rails. That’s when India’s financial stack becomes truly interoperable.
Tip: Tokenised deposits could make UPI 3.0 a reality — turning instant payments into intelligent payments.Impact on Indian Banks, Fintechs, and Regulators
For banks, tokenisation changes how deposits are managed and moved. It could eliminate reconciliation delays, reduce fraud, and support “always-on” liquidity between partner institutions. RBI’s working paper suggests that tokenised systems can reduce settlement risk by over 30%.
Fintechs, too, stand to benefit. Platforms using Banking Tokenisation Tools will be able to embed programmable payments into lending, insurance, or supply chain workflows — something impossible with today’s static account transfers.
Expected benefits across stakeholders:
- Banks: Real-time asset mobility and lower clearing costs.
- Fintechs: Smart-contract-based settlements and flexible use cases like tokenised BNPL or escrow.
- Regulators: Transparent transaction trails and instant compliance visibility.
- Users: Faster, cheaper, safer digital money with embedded logic for specific goals.
Globally, similar pilots by the Monetary Authority of Singapore (MAS) and BIS “Project Agorá” show how tokenised bank money can co-exist with central bank currencies. India’s advantage lies in its proven digital infrastructure — UPI, Aadhaar, and eKYC already form the rails for such integration.
Insight: Tokenised deposits will make compliance invisible — encoded into every transaction itself.The Road Ahead: Tokenised Future of Indian Banking
The real question isn’t if tokenised deposits will happen — it’s when. Once RBI finalises guidelines, banks may start rolling out pilot wallets for corporate clients, followed by consumer-facing options. Through Fintech Innovation India, startups and neobanks are likely to play a key role in building interfaces for token-based payments and savings.
According to Deloitte’s 2026 Fintech Forecast, tokenisation could unlock ₹3–5 trillion in annual liquidity savings for Indian banks by reducing manual settlement friction. It could also improve capital efficiency for NBFCs and digital lenders through programmable, collateralised deposits.
But with innovation comes caution. Data privacy, cyber risk, and interoperability will demand coordinated regulation. RBI may also link tokenised systems to its upcoming Digital Payments Intelligence Platform (DPIP) for real-time fraud monitoring.
Tip: Tokenised deposits are not the end of traditional banking — they’re the next layer of trust on top of it.As India builds bridges between CBDC, UPI, and tokenised deposits, users could soon experience payments that are instant, compliant, and programmable. The future of banking will no longer be about where your money is stored — but how intelligently it moves.
Frequently Asked Questions
1. What are tokenised deposits?
They are digital representations of bank deposits that exist as secure tokens on a regulated ledger — backed 1:1 by real bank money.
2. How are tokenised deposits different from CBDC?
CBDC is issued by the RBI, while tokenised deposits are issued by commercial banks and function as digital versions of customer deposits.
3. Can tokenised deposits work with UPI?
Yes. Future UPI versions could use tokenised deposits for programmable payments and instant blockchain-level settlement.
4. What benefits do they offer users?
They make transactions faster, safer, and smarter — adding logic like auto-pay or conditional transfers directly into the money itself.
5. When will tokenised deposits launch in India?
Pilots are expected through 2025–26 under RBI’s regulatory sandbox before a phased rollout to major banks.