Tokenisation of real-world assets offers efficiency but carries systemic risks. Analyse the regulatory challenges for India.

Tokenisation turns ownership of a real-world asset (a bond, a building, gold) into a digital token traded on a distributed ledger. The 30th FSDC meeting (October 2026) discussed tokenisation as part of fintech innovation [1]. The RBI, however, sees it as a new channel for crises to spread. India's task is to gain the efficiency without importing instability.

Efficiency gains

• Fractional ownership: high-value assets such as property and infrastructure bonds become divisible, which widens retail access.
• Faster, programmable settlement: tokens can cut the number of intermediaries. This supports the FSDC's push to lower the cost of intermediation [1].
• Resource mobilisation: tokenisation can deepen investment flows, including into GIFT-IFSC [1].

Systemic risks

• Crypto interlinkages: the RBI's December 2025 Financial Stability Report flagged risks from links between tokenised assets and crypto markets [2].
• Run risk: the RBI says stablecoins fail the tests of singleness, elasticity and integrity. In a panic, mass redemptions force the issuer into fire-sales of safe assets [3].
• Liquidity mismatch: tokens can trade round the clock while the underlying land or loans stay illiquid.
• Operational concentration: shared ledgers and custodians become single points of failure for cyber attacks.

Regulatory challenges for India

• Jurisdictional ambiguity: a tokenised bond can be a security (SEBI), a payment instrument (RBI) and, in GIFT-IFSC, an IFSCA product at the same time. This creates gaps and regulatory arbitrage (activity shifting to the lightest-touch regulator).
• Siloed oversight: each regulator watches only its own sector. The IMF's FSAP asked India for a centralised systemic-risk dashboard and for putting stability ahead of developmental goals [4].
• Weak coordinating architecture: the FSLRC proposed a statutory FSDC leading on systemic risk [5]. The Council still rests on an executive notification.
• Mandate tension: the "development" side favours innovation, while the RBI prefers CBDCs to private tokens [2].
• Legal gaps: how token-holders are treated in insolvency, how token ownership links to land and property records, and how rights are enforced across borders all remain unsettled.

Tokenisation is therefore less a technology problem than a coordination problem. India should apply the principle of "same activity, same risk, same regulation". It should test products in RBI and IFSCA sandboxes and anchor settlement in the e-rupee. Giving the FSDC statutory backing and a shared risk dashboard would help [4][5]. Calibrated, coordinated regulation can make tokenisation a tool for financial deepening (SDG 8.10) rather than a source of contagion.