The Reserve Bank of India (RBI), the central bank of India, has cleared the blockchain-based MSME finance solution developed by Indian Bank Digital Infrastructure Company (IBDIC) Pvt Ltd for wider adoption.
This approval was made after successful completion of testing under the RBI's fifth cohort of regulated sandboxes (RS) and was characterized by a thematically neutral approach to fintech innovation.
RBI confirmed the viability of its products in today's press release on August 15, 2025. It states that the solution met predefined test benchmarks. Currently eligible for recruitment by entities such as banks and NBFCs that are pending compliance with applicable regulations.
Blockchain Solutions for MSME Credit Access
IBDIC solutions are looking to improve access to affordable finance for low-rise MSMEs within their enterprise supply chain. Blockchain and smart contracts are used to tokenize invoices accepted by large companies that form the backbone of these supply chains.
Tokenized invoices serve as a digital proof of value by the supplier. Lenders can fund tokens to these MSMEs through digital platforms. Payments flow as a token from buyers to sellers, effectively digitizing and accelerating the working capital cycle.
In particular, IBDIC has partnered with major Indian financial institutions, including ICICI Bank, HDFC Bank, Yes Bank and Aditya Birla Capital.
Only one blockchain solution will pass the test in the fifth sandbox cohort
The fifth RS cohort began in August 2024 after being published in late 2023. Of the 22 applications, only five were selected for testing. Two of these, IBDIC and Finagg Technologies, offered similar vendor finance models. The RBI announcement confirms that only IBDIC products have successfully passed the sandbox, and its structure and compliance preparation have been verified.
Sandboxes become “on tap” for new innovations
According to previous updates from April 2025, RBI has moved to the “on-tap” model of sandbox. This means that fintech and crypto companies can apply at any time without waiting for a cohort of themes.
It said that the application must be submitted via the Pravaah portal and will be evaluated under the updated Regulatory Sandbox Enabling Framework (February 2024).
Overall, clearance from RBI is a major regulatory step for blockchain in the Indian financial sector. Regulators show comfort with tokenized assets for permitted blockchain and enterprise use. The success of IBDIC could pave the way for tokenization as a service, Defi Tools for SMEs, and more blockchain pilots for Indian banks.
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