India’s digital rupee may be moving beyond its initial role as an alternative form of payment, with Finance Minister Nirmala Sitharaman urging the Reserve Bank of India to sharpen its CBDC capabilities as tokenised financial assets begin to gain ground.
Speaking at the Global Fintech Fest 2026 in Mumbai on Friday, Sitharaman asked the RBI to build further on its wholesale and retail central bank digital currency pilots, pointing to the digital rupee’s potential role as the settlement layer for tokenised bonds and other assets.
The push comes after India completed its first tokenised corporate bond pilot, where the security and payment moved simultaneously using the digital rupee. The transaction offered an early demonstration of how CBDC could become part of the financial plumbing behind tokenised markets.
“I urge the RBI to further advance and also develop what it has initiated through both the wholesale and retail CBDC pilots,” Sitharaman said, according to PTI. “The RBI needs to continue to sharpen its capabilities with the digital rupee.”
Why tokenisation puts the digital rupee back in focus
Tokenisation essentially converts the ownership rights of an asset, such as a bond, into a digital token that can be transferred over digital infrastructure.
But digitising the asset solves only one half of the transaction. The corresponding payment must also move securely and at the same time.
“Every tokenisation architecture being tested across the world eventually returns to the foundational question: What is the money leg made of?” Sitharaman said.
That is where the digital rupee could play a larger role.
REC recently completed India’s first tokenised corporate bond pilot under the Securities and Exchange Board of India’s regulatory sandbox. In the transaction, the tokenised bond and the digital rupee were exchanged simultaneously, allowing the asset and payment legs to settle together.
“The monetary settlement was possible due to the presence of CBDC. It also shows the synergy between the two regulators RBI and SEBI,” Sitharaman said.
Such transactions could reduce settlement risks and potentially cut the number of intermediaries required to transfer financial assets.
For the RBI, this could also give the wholesale digital rupee a clearer use case as financial markets experiment with tokenised securities.
Faster finance also means faster risks
Sitharaman, however, cautioned that the same technologies that make financial transactions faster could also allow problems to spread more quickly.
Tokenisation could make transfers almost instantaneous and remove unnecessary intermediaries, she said, but errors, fraud and market shocks could also travel through financial systems at greater speed.
Her remarks came alongside a broader warning over the growing use of artificial intelligence in finance and cybersecurity.
Sitharaman said autonomous cyber capabilities powered by AI may be advancing faster than the safeguards being developed to control them.
“A leading lab, I’m not naming here, now judges autonomous cyber capability to be moving faster than its existing controlling mechanisms,” she said, adding that existing controls were “not catching up”.
“AI acts as a double-edged sword. It helps spot fraudsters and fraud faster, but it also allows attackers to automate larger, more sophisticated cyber attacks.”
The challenge for regulators, she indicated, will therefore be to capture the efficiency offered by technologies such as tokenisation, agentic AI and eventually quantum computing without allowing new systemic risks to build up alongside them.
Common global voice for Indian tech
The finance minister also proposed the creation of a federated industry platform bringing together companies across India’s technology ecosystem.
Such a platform could give the sector a stronger collective voice in discussions with foreign governments and regulators as countries develop rules covering AI, digital infrastructure, cybersecurity and other emerging technologies.
“There may therefore be merit in considering a federated industry platform that brings together the broader Indian technology ecosystem, not to speak over individual communities, but to give the sector a credible collective voice internationally,” Sitharaman said.
The platform could also help identify areas for interoperable standards, share best practices on data and cybersecurity and help Indian companies navigate licensing and regulatory requirements across markets, she added.