RBI Considers Gold Tokenisation on Unified Markets Interface After ₹17,000 Crore Certificate of Deposit Trials

The Reserve Bank of India (RBI) is actively evaluating the tokenisation of gold under its Unified Markets Interface (UMI), aiming to modernize how the precious metal is held, traded, and settled across domestic financial markets.

Speaking at the Global Fintech Fest (GFF) in Mumbai, RBI Executive Director P. Vasudevan revealed that the central bank held preliminary discussions on exploring gold tokenisation as a natural extension of its digital market infrastructure.

"There were some discussions yesterday. We were looking at gold tokenisation as one more avatar that is being explored. There are challenges in the existing modes, but that can be fulfilled by tokenisation," Vasudevan stated during a fireside chat.

Expanding the Unified Markets Interface

The central bank introduced the Unified Markets Interface to build a unified rail where financial assets can be digitally represented on distributed ledgers and settled using wholesale central bank digital currency (CBDC).

The pilot phase of UMI has focused on short-term money market securities. Vasudevan noted that the platform has already facilitated approximately 248 certificate-of-deposit (CD) transactions valued at roughly ₹17,000 crore. About two-thirds of these CD transactions were executed in the secondary market, demonstrating that tokenisation can handle both primary issuance and active post-issuance liquidity.

Beyond certificates of deposit, the central bank is evaluating a wider range of financial instruments, including commercial paper, bank deposits, and corporate bonds, before extending the model to real-world assets like gold.

Why Tokenised Gold Matters to India

India remains one of the world's largest consumers of physical gold, where the metal serves as a traditional store of value, portfolio hedge, and collateral for loans. While financial alternatives like Sovereign Gold Bonds (SGBs) and Gold Exchange Traded Funds (ETFs) exist, each carries unique operational, liquidity, or lock-in trade-offs.

Key benefits of gold tokenisation under the RBI framework:

• Fractional Ownership: Tokenising physical gold allows assets to be divided into smaller digital units, reducing entry barriers for smaller investors and market participants.
• Atomic Settlement: By coupling asset tokenisation with wholesale CBDC on the UMI architecture, transactions can settle near-instantly on a delivery-versus-payment (DvP) basis, eliminating counterparty and settlement delay risks.
• Lifecycle Efficiency: Vasudevan highlighted that tokenisation can cover an asset's full lifecycle, from minting, custodian-backed issuance, and trading to servicing, collateralization, and final redemption.

Precedents and Regulatory Prudence

The initiative builds on India's successful rollout of payment-grade tokenisation. Vasudevan cited the RBI's Card-on-File Tokenisation (CoFT) mandate—enforced since October 2022—under which Indian payment networks have tokenised over 118 crore cards and securely processed upwards of 5 billion transactions.

However, the central bank cautioned that bringing physical and non-standard assets into distributed ledgers brings distinct structural complexities.

Major risks flagged by the central bank:

• Legal Certainty and Title: Defining legally enforceable asset ownership and physical custody rights over the underlying bullion backing digital tokens.
• Data Privacy and Movement: Establishing robust consent management systems and data governance protocols across distributed ledger systems.
• Market and Systemic Liquidity: Managing liquidity migration and ensuring tokenised secondary markets do not disrupt broader macroeconomic and banking stability.

While a formal regulatory blueprint for tokenised gold has not yet been rolled out, the RBI's ongoing technical and institutional assessments signal an intent to transition India's sovereign digital infrastructure from transactional payment rails toward deep capital market integration.

Tags: Reserve Bank of India Unified Markets Interface Central Bank Digital Currency Fintech Gold Markets