The Reserve Bank of India (RBI) will launch a deposit tokenisation pilot on October 8, 2025, aiming to make banking transactions faster and more efficient using blockchain technology.

Deposit tokenisation means that bank deposits will be converted into digital tokens, which can be transferred, traded, or settled seamlessly across platforms. For this pilot, RBI will use the wholesale segment of its Central Bank Digital Currency (CBDC) as the underlying layer.

Using CBDC ensures that tokenised deposits are secure and anchored to central bank money, providing reliability and finality in transactions. Customers will deposit their assets with a trusted custodian, who will issue equivalent digital tokens on a blockchain network. These tokens can then be freely used for interbank or institutional settlements, offering greater flexibility and liquidity than traditional methods.

RBI has previously tested both wholesale and retail CBDC pilots in 2022 to streamline government securities and person-to-person transactions. The new deposit tokenisation initiative also aims to explore similar experiments with money market instruments, such as commercial papers.

Overall, the RBI pilot is expected to make banking faster, cheaper, and more secure, while providing a framework for future digital asset innovations in India.