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RBI approves IBDIC’s blockchain-based MSME funding tool.
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It tokenizes bills to enable faster and cheaper credit.
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IBDIC partnered up with ICICI Bank HDFC Bank Yes Bank and Aditya Birla Capital.
Reserve Bank of India, India’s central banking institution, has approved a blockchain-based MSME funding solution developed by Indian Banks Digital Infrastructure Company (IBDIC), Pvt Ltd. for wider adoption.
The approval follows the successful completion of testing in the Fifth Cohort of RBI’s Regulatory Sandbox. This included a theme-neutral innovation approach to fintech.
In a press statement issued today, 15 August 2025, RBI confirmed the viability of the product. The solution met predefined benchmarks, according to the RBI. It is now available for adoption by banks and NBFCs, pending compliance with applicable regulation.
Blockchain Solution for MSME Credit Access
The IBDIC solution aims to improve access to affordable financing for lower-tier MSMEs in corporate supply chains. It uses smart contracts and blockchain to tokenize invoices that are accepted by large corporations, which form the backbones of these supply chain.
The tokenized invoices serve as a digital proof of the value added by suppliers. The tokens allow lenders to fund these MSMEs via a digital platform. Payments are made as tokens by buyers to sellers. This digitalizes and accelerates the working capital cycle.
IBDIC has partnered with a number of leading Indian financial institutions including ICICI Bank and HDFC Bank.
Related: India’s Central Bank Targets one million Digital Rupee users in June
Only one blockchain solution passes testing in the Fifth Sandbox Cohort
The Fifth RS cohort began in August 2024, after being announced late in 2023. Only five applications were chosen for testing. IBDIC, and Finagg Technologies both offered similar vendor finance models. RBI’s announcement confirms only IBDIC’s product passed the sandbox which validates compliance and structure.
Sandbox is “On-Tap”, ready to receive new innovations
According to an earlier update dated April 2025 the RBI has now adopted an “On-Tap model” for its sandbox. Fintechs and crypto firms are able to apply at any time without waiting for themed cohorts.
The statement stated that applications must be submitted through the PRAVAAH Portal and will be evaluated under the updated Enabling Framework for Regulatory Sandbox. (Feb. 2024).
Overall, RBI’s approval marks a major step forward in the regulatory framework for blockchains in India’s Financial Sector. Regulators have shown a comfort level with permissioned Blockchains and tokenized assets. IBDIC’s success could pave the way for tokenization-as-a-service, DeFi tools for SMEs, and more blockchain pilots from Indian banks.
Related to Indian Central Bank Launches Retail and Wholesale CBDC
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