“We want to tokenise real-world assets in GIFT City” sounds like a single business plan. To IFSCA, it is almost never one activity it is usually two, and they fall under entirely different regulatory regimes. Getting this distinction wrong at the application stage is one of the most common reasons tokenisation proposals stall or get sent back for restructuring.
The IFSCA (TechFin and Ancillary Services) Regulations, 2025 — notified on July 8, 2025 — superseded and consolidated the earlier, more fragmented FinTech Entity Framework of 2022, which is no longer the operative entry route. The Second Schedule of the TAS Regulations lists 24 permitted TechFin services, and these expressly include Blockchain, DLT, Web 3.0 and Tokenisation.
The catch is definitional. TechFin registration is confined to entities that provide an advanced or emerging technology solution which aids and assists financial products, financial services or financial institutions — in other words, a TechFin registrant is a technology vendor to the financial ecosystem. Registration alone does not permit the entity to issue financial products, solicit investors, or manage assets in its own right.
Most tokenisation pitches blend two very different limbs without realising it:
Designing and licensing the technology: smart-contract issuance engines, token lifecycle software, compliance and whitelisting modules, cap-table and administration tooling supplied to regulated entities or non-resident clients. This is squarely TechFin, and it qualifies for a Certificate of Registration (CoR) under the TAS Regulations today, as things stand, without needing to wait for any further framework.
The word that changes everything here is “manage.” If the entity itself issues tokens representing real-world assets to investors, pools investor money, or exercises discretion over the underlying assets, that is a financial service or financial product activity not a TechFin service. A TechFin CoR does not cover it, and conducting it under a TechFin registration would be treated by IFSCA as a breach of the regulatory perimeter. Depending on the exact structure, this limb instead routes to registration as a Fund Management Entity (if it is pooled alternative-asset management), capital-markets authorisation or listing requirements (if the tokens qualify as securities), or the regulatory sandbox.
For the technology-provider limb, the path is reasonably clear:
One point worth flagging for anyone still operating under a legacy FE Framework authorisation: existing authorised TechFin entities were required to migrate to a CoR within 12 months of the Regulations coming into force. That window, running from the July 8, 2025 notification, closed on July 8, 2026 — which means any entity still holding a legacy authorisation and yet to migrate should treat this as overdue, not merely urgent.
There is currently no completed licensing category for tokenisation-as-a-business in its own right. IFSCA published a consultation paper on 26 February 2025, “Regulatory Approach towards Tokenization of Real-World Assets,” covering asset classification, issuance, trading, custody, risk management and regulatory oversight. Notably, it did not put forward specific proposals — it posed questions, including whether the issuance of digital tokens should itself be a regulated activity. IFSCA’s stated intent is to identify the activities that need regulating in the digital token market and calibrate requirements proportionately and on a risk basis. The direction of travel is clear — token issuance and platform operation will very likely become regulated activities — but the final regulations have not yet been notified.
In the interim, the practical route for entities actually operating tokenisation platforms has been the regulatory sandbox. IFSCA has given conditional approval to a handful of entities to run tokenisation platforms this way — Realdom India Private Limited, for instance, went through the sandbox process to set up its Pinvest Exchange for fractional real-estate tokens, and platforms such as Terazo have launched tokenised real-estate products under the sandbox regime.
The sandbox architecture itself has also been updated recently. The IFSCA FinTech Sandbox Framework issued on March 16, 2026 superseded both the 2020 Regulatory Sandbox circular and the 2022 FE Framework. Clause 7 of the 2026 Framework now requires every applicant to first assess whether the TAS Regulations apply to their activity before applying for sandbox entry — effectively forcing applicants through the same Limb 1 / Limb 2 classification exercise set out above, before IFSCA will even look at a sandbox application.
Yes — but only partially and conditionally, and the right answer depends entirely on which limb the entity actually intends to monetise from GIFT IFSC finace
Entities exploring tokenisation in GIFT IFSC are best served by drafting their application around the technology-provider limb for a CoR, and routing any issuance or asset-management activity separately through the 2026 sandbox or the FME regime, as applicable. Before filing, it is worth using the IFSCA Informal Guidance Scheme — stakeholders can seek regulatory guidance through this scheme, or reach out to FSSRD for interpretation support — to obtain a written view on whether a specific “asset management tools” offering crosses into fund management. That written comfort is well worth having while the framework remains mid-transition and the final tokenisation regulations are still pending.
This article reflects PKM Advisory’s analytical reading of the current regulatory position and is intended for general information only — it is not legal advice. Entities evaluating a specific tokenisation structure should seek formal guidance from IFSCA or qualified counsel before proceeding.
