Finance Minister Nirmala Sitharaman Urges RBI to Accelerate Wholesale and Retail CBDC Pilots — September 13, 2026

Speaking at the Global Fintech Fest in Mumbai, Union Finance Minister Nirmala Sitharaman called on the Reserve Bank of India (RBI) to significantly advance and expand its Central Bank Digital Currency (CBDC) initiatives, emphasising that India must sharpen its capabilities around the digital rupee as tokenisation, agentic artificial intelligence (AI), and quantum computing reshape global finance.

The minister pointed out that the global financial architecture is undergoing a foundational shift towards tokenisation, requiring sovereign-backed digital currencies to handle transactional settlements efficiently and securely.

"I urge the RBI to further advance and also develop what it has initiated through both the wholesale and retail CBDC pilots," Sitharaman said. "Sensing the momentum in this fall and across global markets, the RBI needs to continue to sharpen its capabilities with the digital rupee."

Proving the Use Case: The REC Tokenised Bond Pilot

To illustrate the necessity of sovereign digital currency in next-generation capital markets, Sitharaman highlighted India’s first tokenised corporate bond pilot executed by state-run REC Ltd under the Securities and Exchange Board of India's (SEBI) regulatory sandbox.

The pilot proved how a wholesale CBDC can resolve the critical settlement puzzle in financial engineering.

"Every tokenization architecture being tested across the world eventually returns to the foundational question: What is the money leg made of?" Sitharaman said.

In the REC pilot, both the bond asset and the digital rupee moved simultaneously, allowing the transaction to achieve atomic settlement on the exact day of payment. The finance minister praised the regulatory synergy demonstrated between the RBI and SEBI, referencing the broader Demat 2.0 initiative that leverages tokenised securities, smart contracts, and CBDC to achieve instant, friction-free clearing and settlement in India's corporate debt markets.

'Double-Edged Sword': Systemic Risks and AI

While championing technical progress, the finance minister cautioned financial institutions, fintechs, and market participants that accelerated speeds introduce systemic vulnerabilities.

Sitharaman described artificial intelligence as a "double-edged sword" for financial stability. While AI enables institutions to detect fraud rapidly, autonomous agentic AI can also empower malicious actors to execute coordinated, sophisticated cyberattacks at machine speed.

Key emerging challenges flagged by the Finance Minister:

• Propagation of systemic shocks: When settlement cycles compress into near-instantaneous transfers, software bugs, algorithmic anomalies, and liquidity contagion spread across markets within seconds rather than days.
• Agentic AI risks: Autonomous AI agents capable of executing transactions without human intervention create novel governance, liability, and oversight dilemmas.
• Quantum vulnerabilities: The emergence of quantum computing necessitates immediate upgrades to traditional encryption standards safeguarding core banking infrastructure before legacy defenses become obsolete.

Push for Soft-Touch Regulation

Sitharaman advocated for a calibrated, "soft-touch" regulatory model that avoids stifling technological entrepreneurship while preserving market stability. She noted that she has held discussions with the RBI on developing oversight frameworks that keep pace with cross-sector technology models that blur traditional regulatory boundaries.

To further elevate India's domestic tech prowess internationally, Sitharaman proposed establishing a federated industry platform. This body would unify Indian fintech and technology firms to engage global regulators, negotiate cross-border compliance standards, and participate actively in framing international rules for emerging financial technologies.

Tags: Reserve Bank of India Securities and Exchange Board of India REC Ltd Fintech Banking Digital Rupee