Mumbai, Sept. 9 -- Legal uncertainty, data privacy, liquidity, interoperability and the risk of excessive concentration could pose significant challenges as India expands tokenization of financial assets, Reserve Bank of India executive director P. Vasudevan said on Wednesday.

"Initial costs are there. There are issues of legal clarity, legal certainty, data privacy, data movement, consent management, those are some challenges. So, we need to be mindful," Vasudevan said during a fireside chat on financial assets of tokenization at the Global Fintech Fest 2026.

Tokenization is the process of representing an asset's ownership and transaction records digitally on a blockchain or distributed ledger.

Avoiding fragmented or concentrated toke...