India Proposes Tokenization Bill to Expand Real Estate Access to Middle Class — Will It Pass?

This week, India’s Parliament discussed the introduction of a Tokenization Bill aimed at formalizing asset tokenization in the country. Lawmakers debated the potential of digital fractional ownership to increase wealth accessibility for the middle class while ensuring capital remains within the nation.

Key Takeaways

The proposed Tokenization Bill aims to divide assets like real estate and infrastructure into smaller digital units for investment.
MP Raghav Chadha advocates for this proposal as a way to enhance financial inclusion for India's middle class.
Tokenization could allow ordinary investors to partake in larger assets while ensuring quicker liquidity.
Early attempts at asset tokenization are ongoing, but regulation still poses a challenge for widespread adoption.
India lags behind other countries that have established clearer regulatory frameworks for asset tokenization.

India Proposes Tokenization Bill to Expand Real Estate Access to Middle Class — Will It Pass?

Can Tokenization Enhance Wealth for India’s Middle Class, or Are Regulations a Barrier?

During a session in the Rajya Sabha on Tuesday, MP Raghav Chadha emphasized the need for the government to create a specific Tokenization Bill that would permit the division of assets such as real estate and infrastructure into smaller digital units. This will enable smaller purchases, promoting wider access to wealth.

Chadha likened this initiative to India’s Unified Payments Interface, which revolutionized everyday transactions by lowering entry barriers for many users.

Current Financial Landscape for India's Middle Class

Chadha pointed out that many in India’s middle class mainly invest in savings accounts, fixed deposits, and mutual funds, with minimal exposure to assets that often yield higher long-term returns. He stated that tokenization could empower everyday investors to buy small fractions of significant assets, such as commercial buildings and highways, while providing quicker access to cash without the need for brokers or intricate paperwork.

He urged for tailored legislation and a regulatory sandbox to test novel models under supervision, rather than forcing them into current regulations that may not align well.

India, with a population of approximately 1.46 billion and a median age under 30, has significantly reduced extreme poverty, now estimated at about 1% when using the $2.15-per-day criterion.

Progress in Reducing Poverty

However, broader measures reveal that over 25% of the population still lives below the lower-middle-income poverty threshold. A limited proportion of household wealth is actively invested in financial markets, leaving minimal room for asset diversification into areas like commercial property, infrastructure, or carbon credits.

Emerging Tokenization Efforts and Regulatory Caution

Proponents of tokenization argue that fractional ownership could significantly reduce minimum investment thresholds, thereby pulling dormant capital into productive uses. However, critics note that participation is still confined by income disparities and varying levels of financial literacy among potential investors.

India has seen early developments in asset tokenization, particularly in GIFT City, where companies like Tokeny and Terazo are exploring regulated tokenized real estate structures using public blockchains such as Polygon. These initiatives currently operate within existing securities and virtual asset regulations rather than a cohesive tokenization law.

Both the Reserve Bank of India and the Securities and Exchange Board of India have permitted limited pilot projects, highlighting the importance of caution, especially concerning investor protection and settlement risks.

Increasing State-Level Initiatives Amidst Slow National Progress

State governments are also gaining traction in asset tokenization. In November, Maharashtra Chief Minister Devendra Fadnavis announced efforts to create a framework that could unlock about ₹50 trillion in idle capital through digitized asset transfers, with particular focus on Mumbai’s real estate sector.

This development coincided with revelations from the RBI that its wholesale central bank digital currency trials for financial instruments improved settlement efficiency, further igniting interest in blockchain-driven infrastructure.

Despite these advancements, India remains behind several nations that have moved more swiftly toward asset tokenization. Countries such as the UAE, Singapore, Germany, Hong Kong, and the United States have set clearer legal standards, enabling regulated platforms to offer fractional ownership to individuals.

In Dubai, property tokenization initiatives have significantly lowered entry costs from millions of dirhams to just a few thousand, while Singapore’s Project Guardian aims to develop institutional frameworks that could be scaled for public use.

Indian policymakers remain cautious about rapid advancements in tokenization due to complexities involving land titles, fragmented state regulations, and concerns about data privacy. Thus, although crypto adoption is high at the grassroots level, the scope for tokenization remains limited.