FM Sitharaman pushes RBI to sharpen digital rupee as tokenisation takes off

Finance Minister Nirmala Sitharaman on Friday urged the Reserve Bank of India to further advance its wholesale and retail digital rupee pilots as adoption of tokenisation gains ground in financial markets.

Speaking at the Global Fintech Fest 2026 in Mumbai, Sitharaman said the RBI needs to “continue to sharpen its capabilities with the digital rupee” and develop the work it has initiated on both CBDC pilots.

“I urge the Reserve Bank of India to further advance… both the wholesale and retail CBDC pilots,” she said.


Also Read: Sitharaman calls AI a ‘double-edged sword’, urges soft-touch regulation and faster digital rupee push

Sitharaman pointed to the recent pilot of a tokenised corporate bond by REC Ltd under the Securities and Exchange Board of India's regulatory sandbox as an example of how tokenised assets and the digital rupee can work together.

The bond and the digital rupee moved at the same time in the transaction, enabling near-instantaneous settlement, she said.

“In this entire framework, the monetary settlement was possible due to the presence of CBDC,” Sitharaman said, calling tokenisation a “defining development” of the financial architecture.

She also called for a soft-touch approach to regulating emerging technologies, particularly artificial intelligence, while warning of the risks from its rapid adoption.

“AI acts as a double-edged sword. It helps us spot fraud faster, but it also allows attackers to automate larger, more sophisticated cyber-attacks,” she said.

Sitharaman said she had discussed with the RBI whether emerging technologies could be regulated without constraining innovation.

“Is there a way in which we can do a soft touch regulation… without affecting the innovative threshold?” she said.

She warned that agentic AI, which can autonomously execute actions, could amplify operational and systemic risks as errors, fraud and market shocks spread at machine speed.

At the same time, Sitharaman cautioned against avoiding AI because of these risks, saying institutions that fail to adopt the technology could become less competitive.

“The real choice is between responsible adoption, well-managed adoption,” she said.

Sitharaman said responsibility for AI deployment cannot rest solely with technology teams. Boards, senior management and regulators need to understand where AI is being deployed, what decisions it influences, the data it relies on and the consequences if systems fail.

“AI may assist judgment, but responsibility must remain human and institutional,” she said, adding that higher-risk applications would require stronger review, explanation and appeal mechanisms.

The finance minister also called for greater coordination among financial regulators, competition authorities, data protection authorities and cybersecurity agencies to ensure activities do not escape oversight because they fall between regulatory jurisdictions.

For fintech and technology firms operating outside the traditional regulatory perimeter, Sitharaman backed greater self-regulation.

“Where the regulator's writ ends, your own standards must begin,” she said.

She also proposed a federated industry platform to help Indian technology companies navigate increasingly fragmented global regulations.

Such a platform, she said, could engage with foreign governments and regulators, work towards interoperable standards, share cybersecurity practices and give Indian companies a collective voice as global technology rules take shape.

Also Read: FM Sitharaman on India’s tech leap, demographic dividend, AI risks and road to global scale

Sitharaman also pushed back against pessimism around India's demographic dividend, saying the country's young population was already translating into entrepreneurship, technology-led growth and new businesses.

Referring to habitual critics as “naraz fufajis”, she said young Indians were “building platforms, scaling enterprises” and turning the country's median age into a competitive advantage on its path to 2047.

(With inputs from ANI)