The Central Bank of India, the Reserve Bank of India (RBI), has developed a blockchain-based MSME financing solution developed by Indian Banks’ Digital Infrastructure Company (IBDIC) PVT LTD for wider acceptance.
The approval comes after successful completion of tests under the fifth cohort of RBI’s Regulatory Sandbox (RS), with a theme-neutral approach to fintech innovation.
RBI confirmed the viability of the product in a press release today, 15 August 2025. It says that the solution had met in advance defined test benchmarks. It is now eligible for adoption by entities such as banks and NBFCs pending compliance with the applicable regulations.
Blockchain -solution for MSME -Credit access
The IBDIC solution aims to improve access to affordable financing for MSMEs with lower tier within the supply chains of companies. It uses blockchain and smart contracts to Tokenize that are accepted by large companies that form the backbone of these supply chains.
The tokenized invoices act as digital proof of value addition by suppliers. They enable money lenders to finance these MSMEs against the tokens via a digital platform. Payments flow like tokens from buyers to sellers, so that the working capital cycle is effectively digitized and accelerated.
It is remarkable that Ibdic collaborated with leading Indian financial institutions, including Icici Bank, HDFC Bank, Yes Bank and Aditya Birla Capital.
Only one blockchain solution knew the testing in the fifth sandbox -cohort
The fifth RS cohort started in August 2024 after he was announced at the end of 2023. Of the 22 applications, only five were selected for testing. Two of them, Ibdic and Finagg Technologies, offered comparable supplier financing models. The announcement of RBI confirms that only Ibdic’s product has successfully passed the sandbox, which validates the structure and the willingness of compliance.
Sandbox is “on-tap” for new innovations
According to an earlier update from April 2025, the RBI has now switched to an “on -tap” model for its sandbox. It means that fintechs and crypto companies can apply at any time without waiting for cohorts with theme.
The stated that applications must be submitted via the Pravaah portal and will be assessed under the updated framework for legal sandbox (February 2024).
In general, the approval of the RBI marks an important regulation step for blockchain in the financial sector of India. Regulators show comfort with permitted block chains and tokenized assets for the use of companies. The success of Ibdic could pave the way for tokenization-as-a-service, Defi tools for SMEs and more blockchain pilots from Indian benches.
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