RBI explores tokenising gold amid push to expand Unified Markets Interface - The Economic Times

The Reserve Bank of India (RBI) is reportedly exploring the tokenisation of gold as part of its broader initiative to expand the Unified Markets Interface (UMI). This development signals a strategic move to modernise India’s commodity and financial infrastructure, potentially allowing investors to hold and trade fractionalised, digitally-represented gold assets within a regulated framework. By converting physical gold into digital tokens, the central bank aims to enhance transparency, reduce settlement risks, and streamline the custody process that currently burdens the bullion market.

For market participants, the relevance lies in the potential for increased liquidity and accessibility. Tokenised gold could bridge the gap between traditional bullion trading and the formal banking system, making it easier for smaller investors to participate without the logistical hurdles of physical storage. However, the initiative remains in its exploratory phase, and critical details—such as whether tokens will be backed by allocated vaulted gold or issued via a centralised ledger—are yet to be clarified. Observers should monitor the RBI’s technical framework and its interoperability with existing payment systems, as these factors will ultimately determine whether this innovation deepens market participation or remains a niche experiment.