Tokenization has spent most of the last five years as a blockchain story—a way to put art, gold, or real estate on-chain for a niche audience of crypto-native investors. GFF 2026 tokenization discussions suggested that framing may be running out of runway.
At the Global Fintech Fest (GFF) 2026, held September 8–11 at Mumbai's Jio World Centre under the theme "Potential to Impact: Trusted, Connected, Global Systems for Inclusive Finance," tokenization sat alongside Agentic AI and Quantum as one of three pillars the organizers said would define the next phase of global finance. But the news that actually came out of the event was less about theory and more about plumbing: in the same week as GFF 2026, India's central bank and markets regulator jointly went live with the country's first tokenized corporate bond settlements, using blockchain rails paired with central bank digital currency (CBDC).
That is a meaningfully different conversation from "assets can be represented as tokens." The question worth asking is not whether tokenization is a good idea—most people at GFF 2026 seemed to agree it is. The question is whether India is starting to build the actual financial infrastructure—identity, compliance, ownership, payment, settlement, and reporting—required to make tokenized assets function inside a regulated market, rather than beside it.
This piece works through what was confirmed at GFF 2026, what remains a pilot or a proposal, and why the distinction matters more than the headlines suggest.
The single largest confirmed development was the joint launch of India's first tokenized corporate bond pilot by RBI Governor Sanjay Malhotra and SEBI Chairman Tuhin Kanta Pandey. This wasn't a slide-deck announcement—three actual bond issuances settled on distributed-ledger rails in the same week as the conference:
Together, these three deals moved just over ₹1,025 crore of ordinary Indian corporate debt onto tokenized rails within a single week—a scale small enough to still be called a pilot but large enough that it is no longer purely theoretical.
Separately, RBI Executive Director P. Vasudevan used a September 9 fireside chat at GFF 2026 to disclose that the RBI's Unified Markets Interface (UMI)—infrastructure — infrastructure pairing tokenized financial instruments with wholesale CBDC settlement — has already processed roughly 248 tokenized certificate-of-deposit transactions worth close to ₹17,000 crore, about two-thirds of it in the secondary market. He also said the RBI is looking at adding new asset classes to UMI, including gold, while flagging legal certainty, data privacy, consent management, interoperability, and platform-concentration risk as unresolved questions.
Because the announcements at GFF 2026 weren't about a single token — they were about the rails connecting a token to money, identity, and settlement finality. The corporate bond pilot didn't just tokenize a bond; it paired that token with a wholesale CBDC wallet and a new securities-holding system so that the asset leg and the cash leg move together. That combination — not the token by itself — is what makes this a financial-infrastructure story rather than a blockchain-experimentation one.
India's demat system, introduced in the 1990s, replaced physical share certificates with electronic book-entry records held by depositories—a shift that dramatically reduced fraud and settlement friction in Indian capital markets. At GFF 2026, SEBI Chairman Tuhin Kanta Pandey described the regulators as working toward what has since been widely referred to as "Demat 2.0"—a permissioned, distributed-ledger securities-holding system being built jointly by NSDL and CDSL, designed to record ownership of tokenized instruments rather than conventional demat holdings.
It's worth being precise about what Demat 2.0 currently is: a pilot-stage securities wallet layer used for the corporate bond issuances described above, not a replacement for the existing demat system. Investors participating in the pilot need both a Demat 2.0 wallet and a wholesale CBDC wallet—a closed loop, by design, for a regulatory sandbox.
Dematerialization is a digital record of ownership operating within established financial-market infrastructure—the security is digital, but the underlying processes (transfer, settlement, corporate actions) still largely follow existing, centralized workflows.
Tokenization, by contrast, is a digitally programmable representation of an asset or financial instrument that may support new ownership, transfer, settlement, and automation models—depending on the legal and technical framework built around it.
Neither model is replacing the other — at least not yet. Demat 2.0, as it stands, is a parallel rail being tested on a narrow set of instruments under a regulatory sandbox, with clear boundaries around who can participate.
The Bank for International Settlements has described the underlying appeal of tokenization in similar terms: the potential to fold messaging, reconciliation, and asset transfer — three functions that today sit in separate systems — into a single programmable process. That framing is echoed by market commentary on the REC issuance itself; Sidharth Sogani Jain, founder of Blue Aster Capital and CREBACO Global, has noted that India's corporate bond market isn't a broken system needing repair, but that tokenization could layer programmability onto existing infrastructure and potentially speed up settlement — a more measured take than the "revolution" framing much of the coverage reached for.
Corporate bonds are a logical first test case for tokenized financial infrastructure, and GFF 2026 made clear why. Bonds have well-defined lifecycles — issuance, fixed coupon payments, a known maturity date, and comparatively few corporate actions relative to equities — which makes them easier to encode into a programmable settlement framework than, say, listed shares with dividends, splits, and shareholder votes.
The REC, L&T, and IIFL Finance issuances illustrate the specific mechanics regulators are testing:
What the pilot has not yet tested is the harder part of tokenizing corporate debt as an on-chain security: a functioning secondary market. As of the pilot's launch, the tokenized bonds were listed on NSE and BSE but reportedly carried a lock-in period, and no live secondary trading venue existed yet — exchanges are reported to be targeting a trading mechanism by December 2026. SEBI's Annual Report for 2025–26 has kept the corporate bond tokenization pilot on its stated priorities for the coming year, which suggests the regulator sees this as a multi-year build-out rather than a one-off event.
A tokenized bond sitting on a ledger doesn't complete a financial transaction on its own — it needs a matching layer of tokenized money infrastructure on the payment side. Every trade has two legs: the asset leg and the payment leg. If the bond settles instantly on-chain but the cash still moves through a conventional multi-day banking process, tokenization hasn't actually removed settlement risk — it's just moved it.
This is exactly the gap the RBI-SEBI pilot targeted by using wholesale CBDC — the institutional digital rupee (e₹-W) — as the settlement asset, rather than the retail digital rupee app or any private stablecoin. Because the bond and the cash both settle on the same ledger, the transaction can achieve atomic settlement: the security only changes hands if the payment does, in the same event, removing the timing gap where one party has delivered and the other hasn't.
Concepts worth distinguishing here:
RBI's Vasudevan pointed to the ₹17,000 crore already processed through the Unified Markets Interface as evidence that CBDC-based settlement can operate at meaningful scale — while also cautioning that legal certainty, interoperability between platforms, and the risk of settlement infrastructure concentrating around a small number of CBDC-ready institutions remain open questions.
India did not arrive at GFF 2026 with a blank slate. The country already operates several digital infrastructure layers that, in principle, tokenized finance would need to connect with:
Having these layers does not automatically create a tokenization ecosystem. Aadhaar and UPI were built for identity verification and payments, not for representing programmable ownership of financial assets. The real opportunity, and the open question, is whether these systems can eventually interoperate with tokenized-asset infrastructure — which is a harder integration problem than it might sound, since it involves connecting systems built by different institutions, on different technical standards, under different regulatory mandates, over different time periods.
A useful way to frame the full stack tokenized finance eventually needs to touch:
Identity → Asset → Compliance → Tokenization → Payment → Settlement → Reporting
Each layer does different work: identity establishes who is transacting; the asset layer holds the source-of-truth data about what's being transacted; compliance applies eligibility and KYC/AML rules; tokenization creates the programmable digital representation; payment and settlement move the money and finalize the trade; and reporting closes the loop for regulators, auditors, and the institutions themselves.
This is arguably the most important reframe to come out of GFF 2026. Issuing a token is the easy part. Making that token function as a trusted financial instrument — one a bank, depository, or regulator is willing to stand behind — requires a much larger stack underneath it.
The RBI-SEBI corporate bond pilot is instructive precisely because it had to solve for most of this stack at once—sandbox-level compliance, a new custody wallet (Demat 2.0), a settlement asset (wholesale CBDC), and reconciliation with existing exchange infrastructure—just to tokenize a fairly simple instrument. That's the real signal: the challenge is not creating a token. It's integrating that token into a trusted financial system.
Corporate bonds may be the entry point, but conversations at GFF 2026 pointed toward a wider set of asset classes where similar infrastructure could eventually apply. Infosys co-founder Nandan Nilekani told the event that tokenization's "time has arrived," pointing to land, gold, and corporate bonds as three tracks already in motion at GFF 2026 alone—Maharashtra's draft land-tokenization law, RBI's exploration of gold tokenization, and the live corporate bond pilot.
Nilekani illustrated the broader idea with examples that sit well outside capital markets. In Tamil Nadu, he described a pilot (led by the Dvara group) in which a dairy farmer's cattle are tokenized—a digital record linking each animal's identity, health, and milk-productivity data—so that distant lenders can verify collateral they'd otherwise never inspect, and the farmer can compare loan offers from multiple lenders rather than depend on a single one. In a second example, he described warehouse receipts for stored grain being tokenized so a farmer can offer the same receipt to several lenders at once, rather than being locked into whichever buyer controls warehouse access. A third example involved loan-document standardization and securitization, using smart contracts to make loan records interoperable across lending platforms.
Nilekani was also explicit about a harder design question: regulated assets like bonds and certificates of deposit, he argued, need to be tokenized on a public chain rather than a private one if they are to achieve real liquidity, since a private chain limits access to whoever operates it—while acknowledging that public-chain deployment raises its own data-security and encryption challenges that still need to be worked through. He additionally connected tokenization to GFF 2026's other headline pillar, Agentic AI, suggesting that autonomous agents working continuously to find lenders or markets for a token — rather than only human-initiated transactions — could be what eventually creates the transaction volume needed to justify this infrastructure at scale.
It's worth being clear about status here: the cattle, warehouse-receipt, and loan-document examples are pilot-stage initiatives Nilekani cited as already live or going live, not an application RBI or SEBI has formally regulated. The land and gold tracks remain, respectively, a draft law under review and an idea the RBI said it is exploring—not approved frameworks.
Beyond what was explicitly discussed, the same underlying infrastructure—identity, compliance, tokenization, settlement, reporting — could potentially become relevant to a wider set of asset classes over time, including private credit, trade finance receivables, infrastructure assets, renewable energy projects, real estate, agricultural commodities, and fund units. None of these are approved or operational as tokenized products in India today; they represent areas that may become relevant as the underlying infrastructure matures, not confirmed near-term rollouts.
GFF 2026's tone, especially in RBI's own fireside remarks, was notably measured rather than triumphant. Several structural challenges remain genuinely unresolved:
Regulatory clarity. How should tokenized ownership and transfers be legally recognized relative to conventional securities law, and will the current sandbox approach eventually convert into standing regulation — a question that runs alongside separate efforts like India's proposed Asset Tokenization Bill?
Interoperability. How will different tokenization platforms, depositories, banks, and settlement systems communicate with each other, rather than each building a closed loop?
Liquidity. Tokenization does not automatically create buyers and sellers — the REC pilot bonds, for instance, were tokenized but had no live secondary market at launch.
Custody. Who controls and safeguards tokenized assets, and how does that differ from conventional depository custody?
Compliance. How can KYC, AML, and investor-eligibility restrictions operate continuously throughout a tokenized asset's lifecycle, not just at issuance?
Oracle reliability. How can off-chain asset information — valuations, physical asset condition, ownership disputes — be reliably and verifiably connected to on-chain records?
Privacy. How can financial confidentiality coexist with the transparency that distributed-ledger systems are often designed to provide?
Legacy integration. How do institutions connect new tokenization infrastructure with decades-old core banking, ERP, and depository systems without disrupting existing operations?
RBI's own Executive Director raised several of these — legal certainty, data privacy, consent management, interoperability, and platform concentration — directly in his GFF 2026 remarks, which suggests the regulator itself sees these as unresolved rather than settled.
Banks should watch developments in digital money, tokenized deposits, settlement infrastructure, and collateral applications—particularly how wholesale CBDC settlement scales beyond the current pilot cohort.
NBFCs can explore potential applications involving receivables, loans, and structured financial assets, informed by IIFL Finance's early participation in the corporate bond pilot.
Asset managers should monitor tokenized funds, alternative investments, and digital distribution models as the regulatory sandbox framework potentially extends beyond bonds.
Corporates should consider how tokenization could eventually affect receivables, commodities, and treasury operations, even though most current applications remain pilot-stage.
Financial market infrastructure providers—exchanges, — exchanges, depositories, and clearing entities—should focus on interoperability, settlement design, and market-wide standards, since GFF 2026 suggested regulators expect this infrastructure to eventually support multiple institutions rather than a single closed platform.
Institutions in each category should evaluate these opportunities against their own regulatory obligations and business requirements—GFF 2026 signaled direction, not a finished rulebook.
The broader arc visible at GFF 2026 looks something like this:
Digitization → Dematerialization → Programmability → Tokenization → Interoperable financial infrastructure
Each stage matters, but the final stage is the one that actually changes outcomes for institutions and investors. Representing an asset as a token is a data-modeling exercise. Building a system where ownership, compliance, payment, and settlement can interact efficiently and automatically across an asset's entire lifecycle is an infrastructure exercise—and it's the one India appears to be starting on, cautiously, through the RBI-SEBI corporate bond pilot and the broader Demat 2.0 conversation. It's a similar infrastructure-first shift to what surfaced earlier this year in RWA tokenization discussions at Davos — the emphasis moving from "can an asset be tokenized" toward "what does it take to make that token trustworthy at institutional scale."
The significance of GFF 2026 is not that India suddenly adopted tokenization. It is that GFF 2026 tokenization discussions — backed by an actual, live corporate bond pilot rather than a roadmap slide — moved the conversation from "can this work" toward "what does the surrounding infrastructure need to look like." RBI and SEBI settled real corporate debt on tokenized rails against central bank digital currency. That is confirmed. A functioning secondary market, broader retail access, and standing (rather than sandbox) regulation are not — they remain open questions the regulators themselves have flagged.
What happens next will depend on regulatory clarity, institutional adoption, interoperability between platforms, settlement infrastructure maturity, legal recognition of tokenized ownership, security, and enterprise-grade technology that can connect new tokenized rails to the systems banks, depositories, and corporates already run and trust.
The winners in the next phase may not simply be the organizations that tokenize the most assets, but those capable of connecting tokenized assets to the identity, compliance, payment, and settlement infrastructure that financial institutions already rely on. That is the infrastructure layer Spydra's enterprise tokenization platform — spanning tokenization, oracle and asset-data integration, CBDC connectivity, and Hyperledger Fabric-based enterprise blockchain — is built to support, for institutions preparing for whichever direction India's Demat 2.0 experiment takes next.
1. What is GFF 2026 tokenization? GFF 2026 tokenization refers to the tokenization-related announcements and discussions at the Global Fintech Fest 2026 in Mumbai, most notably RBI and SEBI's joint launch of India's first tokenized corporate bond pilot, settled using blockchain-based infrastructure and wholesale central bank digital currency (CBDC).
2. Why is tokenization important for India's financial infrastructure? Tokenization could let ownership, compliance, and settlement data move together as a single programmable unit, potentially reducing settlement time and reconciliation effort. At GFF 2026, this was tested directly through corporate bond issuances that settled the same day using atomic delivery-versus-payment against CBDC.
3. What is the difference between Demat and tokenized securities?
Dematerialization converts physical securities into digital book-entry records within existing market infrastructure. Tokenization creates a digitally programmable representation of an asset that may support new transfer, settlement, and automation models, depending on the legal and technical framework built around it.
4. What is Demat 2.0?
Demat 2.0 is the term used at GFF 2026 by SEBI Chairman Tuhin Kanta Pandey to describe a permissioned, distributed-ledger securities-holding system being built by NSDL and CDSL for tokenized instruments. It is currently a pilot-stage system used for the corporate bond pilot, not a replacement for existing demat accounts.
5. Why are corporate bonds relevant to tokenization?
Corporate bonds have well-defined life cycles—fixed coupons, a known maturity, and comparatively few corporate actions—making them easier to encode into a programmable settlement framework than instruments like equities. This is why RBI and SEBI chose bonds as the starting point for their sandbox pilot.
6. How could CBDCs support tokenized asset settlement?
Wholesale CBDC can serve as the payment leg in a tokenized transaction, settling alongside the tokenized asset in the same ledger event. This enables atomic delivery-versus-payment, where the security only transfers if the payment does, potentially reducing settlement risk compared to conventional multi-day processes.
7. What are the biggest challenges facing tokenization in India?
RBI officials at GFF 2026 flagged legal certainty, data privacy, consent management, interoperability between platforms, and the risk of settlement infrastructure concentrating around a small number of institutions. Liquidity — the absence of a functioning secondary market for the pilot bonds — is another open challenge.
8. What should financial institutions watch after GFF 2026?
Banks should track wholesale CBDC settlement and tokenized deposits; NBFCs should monitor tokenized receivables and lending applications; asset managers should watch for tokenized fund frameworks; and all institutions should track whether SEBI moves the corporate bond pilot from its regulatory sandbox into standing regulation.
9. How are tokenization and Agentic AI connected at GFF 2026?
Nandan Nilekani argued at GFF 2026 that tokenization and AI agents are complementary: tokenization packages an asset's data into a portable, verifiable unit, while autonomous agents could work continuously to match that token with lenders or marketplaces. He suggested agent-driven transaction volume may be what eventually justifies tokenized infrastructure at scale, rather than human-initiated transactions alone.
