Chief Minister Devendra Fadnavis said on September 9 that the state had made significant progress towards becoming India’s first “tokenised state” and had prepared the Maharashtra Digitisation and Exchange of Land Token Asset Act, or DELTA Act.
A committee has now been formed to undertake a complete review of the proposed legislation.
The proposed framework seeks to use blockchain-based tokenisation for land and other immovable assets. Fadnavis said the initiative could allow ordinary citizens to realise the value of their land and other assets and create liquidity from them.
What could change for landowners
Tokenisation could potentially create a digital representation of rights or interests linked to an underlying land asset, allowing transactions or participation in an asset that is otherwise difficult to divide or sell.
However, the key issue will be determining exactly what ownership or economic right a token represents and how that token is treated under existing property laws.
“Tokenising land could unlock a meaningful share of the ₹50 trillion in dormant capital the state has flagged, while giving smaller investors fractional access to an asset previously reserved for large capital,” said Edul Patel, founder and CEO of Mudrex.
Patel said legal clarity on the relationship between a token and the underlying land title, regulatory oversight and robust digitised land records would be important for the framework to scale.
Could tokenisation make real estate more accessible?
Real estate is a large store of household and institutional wealth, but direct investment typically involves high ticket sizes, limited liquidity and complex documentation.
A tokenisation framework could, in principle, allow economic interests in an asset to be divided into smaller digital units. This could lower the entry threshold for some investors, although it would not by itself remove the risks associated with the underlying property, including valuation, title, liquidity and regulatory risks.
Ashish Singhal, co-founder of CoinSwitch, said Maharashtra’s move could help bring blockchain-based tokenisation into the “real economy”, particularly for land and real estate, which remain relatively illiquid.
“Tokenisation could improve transparency in ownership records, enable fractional participation and create new mechanisms for unlocking liquidity,” Singhal said.
What needs to be clarified
For land tokenisation to work at scale, the digital token cannot operate independently of the underlying property record. The legal framework will therefore need to establish how token holders’ rights are recognised and enforced, and what happens if there is a dispute over the underlying land.
The regulatory treatment of land tokens will also need to be clearly defined. Unlike conventional securities or payment tokens, a token linked to immovable property could involve property, financial and technology regulations at the same time.
Custody, governance, compliance and the infrastructure used to maintain and update land records will also be critical, according to Singhal.
Why digitised land records matter
A blockchain-based token cannot by itself resolve disputes or deficiencies in the underlying title. The reliability of the system would depend on the quality of the land records being digitised and the process used to link those records with tokens.
Patel said robust digitised land records would be the technological foundation for the proposed framework.
If Maharashtra’s proposed law addresses these issues, the state could provide a model for tokenisation of other real-world assets, experts said.
For now, however, the DELTA Act remains a proposed framework and is undergoing review. Its eventual impact on landowners, investors and the wider property market will depend on the final legislation and the rules governing implementation.
