Industry Odisha Bureau, Sep 11: Finance Minister Nirmala Sitharaman urged the RBI to sharpen digital rupee pilots. A tokenised bond trial showed near-instantaneous settlement. She also called for soft-touch AI regulation.
Finance Minister Nirmala Sitharaman urged the Reserve Bank of India forward. She wants faster progress on the digital rupee. Her call covers both wholesale and retail CBDC pilots. Sitharaman spoke at Global Fintech Fest 2026 in Mumbai. Tokenisation is gaining traction across financial markets, she said.
RBI Digital Rupee Pilots Need Sharpening
Sitharaman asked RBI to build on existing CBDC work. Wholesale CBDC mainly serves institutional financial transactions. Retail CBDC offers digital central-bank money for everyday use. “I urge the Reserve Bank of India to further advance… both the wholesale and retail CBDC pilots,” she said. The digital rupee remains under active pilot development. No commercial launch timeline was announced.
Tokenised REC Bond Shows Settlement Potential
Sitharaman highlighted a recent pilot by REC Ltd. The company tested a tokenised corporate bond. It operated under SEBI’s regulatory sandbox. The bond and digital rupee moved simultaneously during the transaction. This enabled near-instantaneous settlement, Sitharaman said. “The monetary settlement was possible due to the presence of CBDC,” she added. She called tokenisation a “defining development” in financial architecture.
Why Tokenisation Matters For Markets
Tokenisation represents financial assets digitally on programmable systems. It differs structurally from cryptocurrency. The digital rupee is central-bank money issued by RBI. The REC pilot links tokenised securities with digital settlement money. Coordinating both legs together can reduce settlement friction. The technology remains at pilot stage, not market-wide deployment.
Sitharaman Seeks Soft-Touch AI Regulation
Sitharaman shifted focus toward artificial intelligence regulation. She favoured a soft-touch approach for emerging technologies. She asked whether innovation could continue without heavy constraints. “AI acts as a double-edged sword,” she said. AI helps detect fraud faster, she noted. It also lets attackers automate sophisticated cyberattacks.
Agentic AI Raises Financial Risks
Agentic AI can execute actions autonomously, Sitharaman warned. This could amplify operational and systemic risks. Errors and shocks could spread at machine speed, she said. Still, she cautioned against avoiding AI altogether. Institutions skipping adoption risk losing competitiveness, she argued. Responsibility must remain human and institutional, she stressed. Boards must understand where AI operates and what it influences. Higher-risk applications need stronger review and appeal mechanisms.
Regulators And Industry Face Coordination Challenge
Sitharaman called for coordination among financial, competition, data and cybersecurity regulators. This would prevent activities escaping oversight between jurisdictions. She backed greater self-regulation for firms outside traditional oversight. “Where the regulator’s writ ends, your own standards must begin,” she said. She also proposed a federated industry platform. It could help Indian tech firms navigate fragmented global rules.
A Dual Modernisation Push
India is exploring digital money and AI-enabled finance together. The REC pilot shows CBDC’s potential beyond payments. AI governance remains a parallel, evolving challenge. The policy task is integrating innovation without weakening oversight.
