Crypto and tokenisation is the part of fintech that deals with money and assets that no central bank issues. It covers three kinds of digital asset. Cryptocurrencies, such as Bitcoin, have a price that rises and falls with demand. Stablecoins are tokens whose value is tied to a currency, usually the US dollar, so that one token stays worth one dollar. And real-world assets, such as bonds, fund units and loans, can now be recorded as tokens too.
Here is a typical case. You open a trading app in Bengaluru and buy ₹1,000 of Bitcoin. The rupees leave your bank account, usually through a UPI app. What you receive is not a coin or a certificate. It is an entry on a blockchain: a record of who owns what, kept in identical copies on thousands of computers, with no single company in charge of it.
First, the app checks who you are. Every Indian crypto app must complete KYC, the identity check that banks also do, before you can buy. Next, a crypto exchange matches your order to buy with another person's order to sell. Some apps do not run an exchange themselves. They place a crypto on-ramp, a small payment window, inside their app. The on-ramp converts your rupees into crypto.
Your Bitcoin is then held in a wallet. A crypto wallet does not store coins. It stores a key: a long secret number that proves the Bitcoin on the blockchain is yours. Whoever holds the key can move the money, so the key must be protected with strong encryption. Crypto wallet infrastructure lets an app hold such keys and work across several blockchains. For large amounts, MPC wallets and crypto custody split each key between several parties, so that no single person can move the money.
The same technology is now used for bonds, funds and loans. Today, a bond's owner is written in a registry, the official record of who owns it, and a trade takes a day or more to settle. A real-world asset tokenisation platform issues the bond as a token instead, so that it can settle in minutes. Compare this with India's T+1 settlement for shares, where the shares and the cash change hands one working day after the trade.
In India, crypto is legal to buy, but it is heavily taxed. Gains are taxed at 30 percent, and 1 percent tax is deducted at source on most sales. Exchanges must also register with the Financial Intelligence Unit (FIU-IND) and report suspicious transactions.