India wants to tokenise its assets, and two most public commitments came in September.

At the Global Fintech Fest in Mumbai, Maharashtra Chief Minister Devendra Fadnavis announced the proposed DELTA Act, a legal framework for tokenising land and other immovable assets.

In a television interview the same day, he said the state expected to introduce it within four to five months. Six weeks on, no draft is yet public.

The same week, market regulator SEBI announced the launch of Demat 2.0, its pilot for issuing corporate bonds as digital tokens, and published FAQs explaining how it works. The first phase has since closed.

Three issuers raised Rs 1,025 crore in all. REC, the state-owned power-sector lender, took in Rs 500 crore from eighteen investors on September 7 in what has been billed as India's first tokenised corporate bond; Larsen & Toubro, India's largest engineering and construction group, raised another Rs 500 crore; and IIFL Finance, a listed non-bank lender, raised Rs 25 crore. Secondary trading is targeted for December, after a three-month lock-in.

Fadnavis has put the opportunity in property at around Rs 50 lakh crore. SEBI’s corporate bond market pilot is similar in size, close to Rs 52 lakh crore — the Rs 1,025 crore first phase is a toe in the water.

The pilot's technical document is the most detailed official account yet of what a working token system in India requires.

Read side by side, the two initiatives show that tokenisation requires more than technology.

Even if SEBI creates room for property tokens, land titles and a tangle of legal, legislative and technical hurdles will decide which assets can be tokenised and which cannot.

What Does A Token Do?

A token is a digital receipt that proves ownership. It is recorded in a shared record book, called a blockchain, that several trusted institutions keep copies of.

This way, every sale updates all copies at once, so that no one can quietly alter.

The receipt might stand for a bond, a share of a building's rent, a unit in an infrastructure trust, or part of a plot of land.

On its own, it is worth nothing; its value comes from what it represents and from the law that says whoever holds it owns that thing.

Tokenisation turns an existing right into such receipts. That means defining the right precisely, giving the token a legal basis, issuing it, and connecting it to trading, payments, custody, and legal controls.

In SEBI's pilot, the token is the bond itself. It remains a security under the Securities Contracts (Regulation) Act, 1956 — no new asset class is created. Each token carries the bond's ISIN, the 12-character International Securities Identification Number that uniquely tags every listed security in India; terms such as coupon and redemption dates are written into a smart contract, a small programme that applies the rules automatically.

The closest parallel is the 1990s dematerialisation, when paper share certificates became electronic entries without the shares themselves changing. That is why SEBI calls this Demat 2.0.

The Technology Stack

A token system is built in layers.

The base is the ledger, the shared record book itself. SEBI uses a private, permissioned network, meaning only approved institutions can keep copies and add entries. The depositories and stock exchanges operate it, with technology support from NPCI, which operates UPI, RuPay, and most of India's retail payment rails.

Above it come the tokens and smart contracts, which record holdings and pay interest to whoever holds the token on the record date.

Investors need no new account or fresh KYC, because the Demat 2.0 account extends their existing demat account. The depositories manage the private keys, the digital passwords that control each holding, on investors' behalf.

Payment runs in the RBI's digital rupee, so the bond and the money move together or not at all.

Tokens connect to the exchanges' existing bidding and reporting platforms rather than a new exchange; a freeze or attachment on a demat account applies automatically to the tokenised holding.

The primary issuance in September cleared on the digital-rupee rail without reported incident. Secondary trading, due in December, will test the harder questions of liquidity, price discovery, and finality in a two-way market.

Land, though, needs one more layer that bonds do not.

A land token must stay in step with records held elsewhere, including the sub-registrar's register, revenue and survey records, loan charges, and court cases. For bonds, the depository record is the asset.

For land, that outside link is the hardest part to build, because tokenisation changes how a right is recorded, not whether the right is valid.

Land Token Needs Legit Identity

Maharashtra can draft a land tokenisation framework, but a token that pays its holder a share of rent or sale value is a security in all but name. Securities regulation is a Union subject -- SEBI, not Maharashtra, decides whether it can be issued and traded.

SEBI has so far been cautious with fractional property.

A 2023 consultation paper warned of mis-selling; the small and medium REITs that followed in 2024 set a minimum investment of Rs 10 lakh, despite public calls for something closer to Rs 1 lakh.

SEBI's seat on Maharashtra's drafting committee, alongside BSE and NSE, makes a smaller-ticket category more likely. Central property law, though, would still stand in the way.

The Registration Act, 1908, requires any document transferring an interest in immovable property worth Rs 100 or more to be registered; under the Transfer of Property Act, 1882, an unregistered sale does not pass ownership. A token carrying a direct share in land would need a registered deed every time it changed hands.

Farmland faces a further barrier. Under section 63 of the Maharashtra Tenancy and Agricultural Lands Act, 1948, it cannot be sold to a non-agriculturist without the Collector's permission, which rules out most urban token buyers.

One Authoritative Record

Bond ownership is anchored in the Depositories Act, 1996, which makes the depository's register the final word on who owns what. Land has no such anchor.

India's land titles are presumptive, not guaranteed. The government records that a sale took place, but it does not vouch that the seller owned what was sold. This is why buyers and banks typically have a lawyer trace around 30 years of prior title deeds.

Newer flats in RERA-registered projects are easier to sell, partly because developers must declare on affidavit that they hold clear title. But that is the developer's promise, not the state's.

Uncertain records feed litigation. Estimates of property disputes' share of India's civil cases range from about a sixth to two-thirds. A token on a plot with a hidden ownership flaw carries that flaw; fractional tokens spread it across buyers who never saw the paperwork.

The records are also scattered. They are kept by separate revenue, registration, and survey departments, often manually, while mortgages, attachments, and pending cases stay with banks and courts, none of them linked to a ledger.

The fix exists on paper.

Whether every token transfer needs a registered deed depends on what the token represents. A direct share in land does. A unit of a company or trust that holds the land does not, because the Registration Act exempts transfers of company shares. That is how REITs already work, and it is the route DELTA tokens must take to clear retail volumes.

NITI Aayog has published a model law under which the state guarantees titles and compensates owners for errors. Maharashtra could adopt it for one city or class of property and tokenise only what that register covers.

Stamp Duty, Tax, Legislation

Instant settlement also collides with stamp duty, which must be paid before ownership passes. Maharashtra collected Rs 61,855 crore in stamp duty in 2025-26 and targets Rs 68,500 crore this year.

Charging full duty on every token trade would stop a market forming, while exempting trades would erode that revenue. If tokens are structured as securities, the duty rate on their transfer is set by the Union, not the state.

Income tax adds risk. A property token that is not clearly a security could be treated as a virtual digital asset, taxed at a flat 30%, with no set-off of losses and 1% deducted at source.

The legislative contrast is sharper still. SEBI passed no new law for Demat 2.0. The pilot runs under its regulatory sandbox, and a broader framework will be considered only after testing.

What does tokenisation solve that digitised land records and conventional securities cannot? Record digitisation under the Centre's DILRMP has sped up lookup, but has not made ownership fractional. Conventional securities already fractionalise, but at REIT-scale ticket sizes and on T+1 settlement cycles.

Tokenisation offers both together. Finer unit granularity, and programmable, near-instant settlement in digital rupee on one rail that domestic and cross-border buyers can share.

Early Candidates For Tokenisation

Assets with a settled legal identity and a single authoritative record can move first.

The strongest is the state's grid. Praveen Pardeshi, who heads Maharashtra's policy agency MITRA, has said up to 40% or 50% of transmission lines could be tokenised to fund new capacity, with holders sharing the transmission company's income.

Transmission lines have one government owner and regulated income. Held through a trust, they avoid title, registration and farmland rules, as the POWERGRID Infrastructure Investment Trust, listed since 2021, already shows.

REIT units come next. They are securities with checked titles and SEBI oversight, and trade without registered deeds. SEBI's roadmap moves from the current bond phase to retail access and then to other instruments; REIT units fit naturally into that progression.

State bonds are the simplest of all, since a tokenised bond keeps its rating and investment eligibility. Maharashtra could issue part of its borrowing on the same rails that have just absorbed REC and L&T, including bonds for new transmission lines.

Newer RERA-registered housing could follow, issued through a company or trust. Sworn title declarations and short ownership chains make it the most credible pool within private property.

What Won’t Work, Yet

Private land, the source of the Rs 50 lakh crore estimate, lacks every advantage the bond pilot relied on.

Direct tokens on individual plots run into the Registration Act, which demands a registered deed for every transfer. Farmland tokens run into the Maharashtra Tenancy Act, which bars most urban buyers from owning agricultural land.

Retail tokens outside a SEBI category have no institutional buyers and no exchange liquidity. Taxed as digital assets, these face a flat 30 per cent rate, no loss set-off, and a 1 per cent TDS on every transfer. Either way, the retail market closes before it opens. Besides, a separate state-run trading venue would compete with BSE and NSE, which SEBI has already wired into the bond-token pilot through investors’ existing demat accounts. Starting fresh means fragmenting liquidity in a market that cannot afford it.

The DELTA Act can still do useful work by linking land, loan, and court records in one shared record book. That would support the Centre's land records modernisation programme, which aims to move India towards guaranteed titles.

The Act's specific provisions remain unpublished. The state's September briefings contain the scope – a legal framework for tokenised ownership of immovable property on a permissioned blockchain, licensing for issuing platforms, and rules for secondary trading within state jurisdiction. Specifics on minimum tickets, custody obligations, and how a token would interact with the sub-registrar's record are not yet in the public domain

SEBI’s pilot works because the blockchain changed the mechanics of the issue and settlement of a bond, not the bond itself. A corporate bond was already a settled legal instrument, defined and recognised in existing law; tokenising it required no new legislation.

India's order should follow from that. Grid assets, REIT units and state bonds first, newer RERA housing next, followed by older property and farmland once titles are guaranteed and central laws amended.

Tokenise before the law is fixed, and the market gets a fast way to trade property that may not legally belong to the seller. Few investors will touch that.