New Delhi: A new idea is quietly gaining ground in India’s policy circles—asset tokenisation. At its core, it is about turning ownership rights in physical or financial assets into digital units that can be bought and sold on blockchain-based systems. What was once a niche concept in fintech discussions is now beginning to attract legislative attention.
The shift became visible when Raghav Chadha introduced the Asset Tokenisation (Regulation) Bill, 2026 as a Private Member Bill. While such bills rarely translate directly into law, they often reflect ideas that are starting to gain traction within policymaking spaces.
Turning assets into digital shares
Tokenisation works by breaking down an asset into smaller digital units. These units, or tokens, represent fractional ownership and are recorded on a blockchain—a decentralised ledger designed to securely track transactions.
Consider a high-value asset like commercial real estate. Instead of requiring a single buyer to invest a large sum, ownership can be divided into thousands of tokens. Investors can then purchase smaller portions, making participation possible at much lower entry points.
This ability to split ownership is often described as a shift toward broader access. Assets that were traditionally limited to wealthy individuals or institutions can, in theory, become available to a wider base of investors.
Why the idea is gaining traction
The appeal of tokenisation lies in its potential to address persistent inefficiencies in financial markets.
One major advantage is accessibility. High-value investments—such as property or certain financial instruments—usually demand significant capital. Tokenisation reduces that barrier, opening the door to smaller investors.
Liquidity is another factor
Assets like real estate are difficult to sell quickly. Tokenised versions, however, can be traded on digital platforms, potentially allowing investors to enter and exit more easily.
There is also the promise of greater transparency. Because transactions are recorded on blockchain systems, ownership records are harder to alter and easier to verify. This can reduce disputes and streamline processes that are often slowed by intermediaries.
An evolving and uncertain space
Regulators are grappling with basic questions: how should these digital tokens be classified, who is responsible for holding them securely, and how should cross-border disputes be handled?
In India, the framework is even less defined. While digital assets have been brought under the tax net in recent years, there is no dedicated structure governing tokenised real-world assets. This leaves both investors and businesses operating in a regulatory grey zone.
Risks that cannot be ignored
The lack of clarity brings its own set of risks. Without proper oversight, platforms dealing in tokenised assets could expose investors to fraud or operational failures.
Another concern is enforceability. Owning a digital token linked to an asset is meaningful only if the legal system recognises and protects that claim. Without this link, the token risks becoming a purely symbolic holding.
Technology-related vulnerabilities also remain. Blockchain systems are designed to be secure, but they are not immune to coding errors, cyberattacks or system breakdowns.
There is also a broader concern around financial stability. If tokenised assets begin trading widely without sufficient safeguards, they could introduce new forms of market volatility.
A push for regulatory structure
The proposed legislation seeks to bring order to this emerging space. It aims to define how tokenised assets can be issued, traded and stored, while also establishing oversight mechanisms and investor protection measures.
At its heart, the effort is about balancing two priorities: enabling innovation while maintaining financial stability. Whether the government chooses to adopt or adapt such proposals remains to be seen, but the conversation has clearly begun.
Global signals and local choices
Around the world, tokenisation is moving from experimental stages to early adoption. Financial institutions have begun testing tokenised bonds, while some markets are exploring fractional ownership of real estate through digital tokens. Regulators in countries like Singapore and Switzerland are creating controlled environments to study these developments.
India’s approach will be shaped by how it interprets these global trends. With a large and increasingly tech-savvy investor base, the country has both the opportunity and the responsibility to get the framework right.
More than just crypto
It is important to distinguish tokenisation from cryptocurrencies. While both rely on blockchain technology, tokenisation is tied to tangible or financial assets with underlying value. This connection may make it more acceptable to regulators who have been cautious about purely speculative digital currencies.
In that sense, tokenisation is less about replacing traditional finance and more about reshaping how it functions.
The road ahead
For now, asset tokenisation in India remains at an early stage. The introduction of a legislative proposal does not immediately change the landscape, but it does mark a shift in how the subject is being viewed.
As digital infrastructure expands and investor awareness grows, the demand for a clear regulatory framework is likely to intensify. The pace at which India responds could influence its role in the next phase of financial innovation.
A new way to think about ownership
The idea of dividing ownership into tradable digital units would have seemed abstract not long ago. Today, it is becoming increasingly plausible.
Tokenisation offers a vision of markets that are more accessible, assets that are easier to trade, and systems that are more transparent. At the same time, it raises questions that require careful regulation.
For India, the debate is no longer about whether this shift will happen, but about how it will be managed when it does.
Reported By: Tarun Sharma
