What Are Tokenised Deposits?
In simple terms, tokenised deposits are digital versions of the money you already hold in your bank account. Instead of being stored as an entry in a bank’s database, your funds are converted into digital tokens issued by your bank, fully backed by traditional deposits.
Under Rbi Tokenised Deposit Framework, these tokens can be transferred or settled instantly across banks, apps, or merchants using blockchain or distributed ledger infrastructure. Unlike cryptocurrencies, they are regulated by RBI and represent real, redeemable rupees — not speculative assets.
Think of tokenised deposits as your bank balance with a digital body. They combine the trust of deposits with the speed and programmability of digital tokens — allowing banks to build new features like instant cross-bank settlements and programmable payments.
Insight: Tokenised deposits are still your bank money — just wrapped in faster, programmable technology.How They Differ from Wallet Balances
Many users confuse tokenised deposits with wallet balances. But they are fundamentally different in structure, safety, and use cases. Under Wallet Regulation Guidelines, wallets like Paytm or PhonePe Prepaid Wallets are managed by non-banking entities under RBI’s Prepaid Payment Instrument (PPI) rules. Tokenised deposits, on the other hand, are bank liabilities — not prepaid funds.
Here’s how they differ:
| Feature | Tokenised Deposits | Wallet Balances |
|---|---|---|
| Issuer | Banks regulated by RBI | Payment companies or fintechs |
| Regulation | Banking Act & RBI deposit norms | Prepaid Payment Instruments (PPI) |
| Backing | Fully backed by deposits | Backed by escrow balances |
| Interest | Earns regular savings interest | No interest on wallet funds |
| Usage | Cross-bank and programmable | Limited to in-app or partner merchants |
| Safety | Bank guarantee | Non-bank escrow |
In short, wallet money is prepaid and stored, while tokenised deposits are on-ledger bank deposits — traceable, interest-bearing, and interoperable.
Tip: Wallets are like prepaid cards — tokenised deposits are like your savings account going digital.Why RBI and Banks Are Exploring Them
RBI’s tokenisation pilots, detailed under Bank Tokenisation Use Cases, are exploring how banks can issue and redeem digital deposit tokens instantly. This helps make India’s financial ecosystem more efficient, especially for large-value, cross-platform, or programmable payments.
Key reasons for this shift:
- Settlement speed: Tokenised deposits can move instantly between banks using distributed ledgers.
- Reduced cost: Eliminates intermediaries like aggregators or switches for interbank settlement.
- Programmability: Enables “smart payments” — for example, rent payments that auto-release on a set date.
- Interoperability: Works across payment rails, from UPI to CBDC experiments.
- Security: Full traceability under RBI oversight, reducing fraud and misuse.
Several leading banks — including HDFC, ICICI, and Axis — are currently running closed pilots to test tokenised deposit flows for retail and business payments. The findings will likely shape the first national rollout in 2026.
Insight: Tokenised deposits could be the “missing link” between traditional banking and blockchain-powered money.What It Means for Everyday Users
For users, tokenised deposits promise faster and safer digital transactions without leaving their trusted banks. As mentioned in Future Of Digital Deposits, these deposits will power next-generation banking apps, payrolls, and business settlements — while staying fully compliant with RBI’s banking regulations.
What users can expect:
- Instant transfers: Faster than NEFT or IMPS, even across banks.
- Interest-bearing funds: Unlike wallet money, tokenised balances earn bank interest.
- Better visibility: Transparent tracking of tokenised flows in your banking app.
- Secure environment: RBI-backed token issuance ensures zero crypto-like volatility.
- Future readiness: Seamless integration with CBDC and programmable payment systems.
For merchants and fintechs, tokenised deposits also simplify compliance — since each token already carries embedded transaction proof and audit trails.
Tip: If wallets made payments easy, tokenised deposits will make them intelligent.As India builds its digital money stack — from UPI to CBDC and now tokenised deposits — the future of finance is shifting toward instant, interest-bearing, and transparent value exchange. For users, that means fewer apps, faster settlements, and greater trust.
Frequently Asked Questions
1. What are tokenised deposits?
They are digital tokens issued by banks, representing your existing deposits — fully regulated and redeemable 1:1 for rupees.
2. How are they different from wallet balances?
Wallet money is prepaid and stored with non-banks, while tokenised deposits remain part of your bank account and earn interest.
3. Are tokenised deposits like CBDC?
Not exactly. CBDC is issued by the RBI itself, while tokenised deposits are issued by commercial banks under RBI oversight.
4. Can I use them with UPI?
Yes, pilots are exploring UPI-linked use cases for instant settlement using tokenised balances.
5. When will tokenised deposits launch?
RBI’s pilot phase is active through 2025, with a public rollout expected by early 2026.