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

India’s central bank is reportedly examining the tokenisation of gold, a move aimed at integrating the precious metal into the broader Unified Markets Interface (UMI) framework. In essence, this would involve creating a digital representation of physical gold on a distributed ledger, allowing for fractional ownership and faster, more transparent settlement. For a market deeply rooted in physical bullion, this signals a potential shift toward modernising how gold is traded, stored, and used as collateral.

The market relevance here is twofold. First, tokenised gold could lower entry barriers for retail investors, who currently face minimum lot sizes and storage costs. Second, it aligns with the RBI’s broader push to expand UMI beyond traditional securities, potentially linking gold markets with other financial assets in a single, interoperable ecosystem. This is not a new asset class, but rather a new wrapper for an old one.

What to watch is the regulatory framework—specifically, how the RBI defines the legal status of the token versus the underlying bullion, and whether banks will be permitted to hold these tokens on their balance sheets. The development remains exploratory, so any concrete policy rollout is likely to be gradual. For now, the focus is on infrastructure, not immediate price action.