RBI Launches CBDC Retail Sandbox For Fintech Players

The RBI has launched a CBDC retail sandbox to open up access to digital rupee for fintech players and startups.

Until now, only a few pilot banks could test the CBDC through closed systems. With the retail sandbox, fintech players can now access APIs, build prototypes, and test products in a secure, simulated environment.

“The CBDC retail sandbox will give innovators the space to experiment and build on top of the digital rupee,” RBI governor Sanjay Malhotra said while announcing the launch at the Global Fintech Fest 2025. “It will help create new use cases, improve customer experience, and add value to ongoing pilots.”

Fintechs can either join the sandbox directly or through their partner banks. The RBI said that the move will encourage faster experimentation and reduce operational risks for participants.

Digital Rupee (e₹) or the central bank digital currency (CBDC) is issued by the RBI. It offers features similar to physical cash like convenience of use, guarantee of the RBI, finality of settlement, among others.

To further promote the usage of CBDC, the central bank is also developing a new financial market infrastructure called the Unified Markets Interface (UMI) to enable tokenisation of financial assets and settlements using wholesale CBDC.

The governor said that the UMI will allow tokenisation of financial assets and make settlements more transparent and efficient through smart contracts. Early pilot results, he said, have been encouraging.

Launch Of Tokenised CDs

The central bank also launched a pilot for tokenised certificates of deposit (CDs).

“Asset tokenisation offers new possibilities for India’s financial markets — expanding access, improving transparency, and enabling faster settlements through smart contracts,” Malhotra said. 

He added that the RBI has also conceptualised a Unified Market Interface for tokenisation of financial assets which can be settled using wholesale CBDC.

The pilot platform includes an embedded sandbox for banks, non-banks, and fintechs to experiment and innovate. It will allow tokenised CDs to be issued and settled digitally, helping reduce friction in interbank markets.

Governor Malhotra also underlined that India’s success in digital finance has come from close cooperation between regulators, industry, and government. “The synergy between public rails and private innovation is one of the main reasons for India’s digital success,” he said.

Emphasis On ULI

Besides, the governor also emphasised the need for Unified Lending Interface (ULI) to revolutionise credit models using data, similar to what UPI has been to digital transactions. “Despite best efforts by the RBI, there still is a huge unmatched demand in delivery of credit. ULI can be a bridge in meeting this need,” Malhotra.

Since its launch, the governor added that it has expanded to 120 data sources and services, 58 lenders and 3.2 Mn loans have been sanctioned amounting to INR 1.7 Tn. 

RBI piloted the ULI (originally known as the Public Tech Platform for Frictionless Credit) in August 2023. The pilot focused on streamlining and digitising credit delivery for products such as Kisan Credit Card loans, Dairy Loans, MSME loans, personal loans and home loans using integrated data sources like Aadhaar e-KYC, land records, PAN validation, and account aggregators.