India’s Central Bank to Pilot Deposit Tokenisation in Next Phase of Digital Currency Push

On October 7, 2025, Reuters reported that the Reserve Bank of India (RBI) is preparing to launch a pilot program for deposit tokenisation — a new step in its phased rollout of digital currency infrastructure.

According to an unnamed RBI official, the pilot will involve select commercial banks issuing digital tokens that represent customer deposits. These tokens would be used to settle transactions on a distributed ledger platform, similar to the system already being used in the RBI’s ongoing wholesale CBDC pilot.

Unlike the central bank-issued digital rupee, these deposit tokens would be backed by liabilities of the issuing banks. The tokens are intended to serve as a regulated, digital version of money already held in customer accounts, offering potential improvements in settlement efficiency and transaction speed.

The RBI is currently in discussions with participating banks to finalize technical design and compliance frameworks. The pilot is expected to begin in the coming months.

India has been gradually expanding its CBDC initiatives since late 2022, with ongoing pilots in both the retail and wholesale space. The deposit token trial marks an extension of this strategy, aimed at exploring how tokenised bank money could function within a regulated financial ecosystem.