CBDCs & Blockchain: India’s Next Leap in Fintech Innovation

India is poised at the forefront of a fintech revolution, driven by blockchain technology, Central Bank Digital Currencies (CBDCs), and digital asset tokenization. Mr. Manhar Garegrat, Country Head (India) at Liminal Custody, explained to TICE News how these innovations are reshaping the country’s financial landscape.

CBDCs – India’s Digital Cash Revolution

“Unlike traditional digital payments, there is no real digital equivalent of cash that settles instantly. Cryptocurrencies like Bitcoin and Ethereum have solved that problem,” said Garegrat. 

He highlighted that while India boasts a robust payment infrastructure through UPI, public blockchain adoption could further enhance efficiency and global interoperability. CBDCs, or Central Bank Digital Currencies, represent the government’s response to the growing need for real-time, secure digital payments.

With the e-Rupee initiative, citizens can now transfer digital currency instantly without waiting for bank confirmations. This mirrors the advantages of cash, but in a secure digital form. 

Tokenization – Bridging Real Assets and the Digital World

Tokenization extends the digital payment concept beyond currency. Physical assets such as real estate, securities, or land parcels can now be represented as digital tokens. This process creates a seamless, tradable, and highly secure digital representation of real-world assets.

Why Custody Matters

“Custody is the backbone of the digital asset ecosystem. It ensures that private keys, wallets, and transactions are managed securely,” Garegrat explained. Liminal Custody creates wallets linked to blockchain networks while managing private keys.

By merging traditional finance compliance—including anti-money laundering, taxation, and regulatory checks—with blockchain technology, custodians reduce risk while ensuring efficiency.

Security is a top priority. Custodians partner with global service providers to prevent hacking, fraud, and social engineering attacks. This ensures digital assets are safe, accessible, and regulated.

India’s Blockchain Infrastructure and Challenges

India’s infrastructure, while strong in private networks, still lags in public blockchain adoption. Garegrat emphasized the need for India to embrace public blockchains like Ethereum and Solana to integrate with the global digital economy.

“Public blockchain frameworks, with proper risk mitigation, could significantly benefit India,” he noted.

Globally, countries like the US, Switzerland, Japan, and Europe have adapted legal and regulatory frameworks to accommodate blockchain and digital asset technologies. India is beginning to follow suit, creating a framework for secure, transparent, and compliant digital asset management.

Custody for Cross-Border Accessibility

Custodians like Liminal are working to support multiple blockchain networks while ensuring data privacy, security, and compliance with Indian laws such as the DPDP Act. By separating functions—custodians, exchanges, and brokers—India is adopting the risk management principles of traditional finance in the digital asset ecosystem.

Over the next five years, Garegrat envisions India’s digital asset custody market evolving into a segregated, fully compliant, and globally interoperable ecosystem. This approach will enable secure storage, settlement, and trading of digital assets while fostering innovation, cross-border payments, and economic growth.

Shaping India’s Digital Finance Future

India is now at a pivotal moment in its digital finance journey, combining the benefits of traditional finance with blockchain’s transparency, efficiency, and security. Custodians, regulators, and innovators are together shaping a secure, compliant, and globally integrated digital asset ecosystem.

“By merging traditional finance and blockchain technology, India can lead in digital asset custody and unlock new opportunities for its economy,” concluded Garegrat.