By Ramaswamy Iyer, Founder & CEO of Vayana
As 2025 closes and businesses chart their path into 2026, one thing is clear: the rules of finance, trade, and credit are being rewritten. Technology is reshaping how capital, trust, and trade flow across India’s financial ecosystem—from AI-driven risk engines to and real-time digital settlements. The next 12–24 months will distinguish institutions that actively shape these shifts creating new possibilities, reducing systemic risks, and redefining the mechanics of commerce from those that simply respond.
Trend 1: AI will ‘reduce risk’ and help ‘underwrite at scale and speed’
AI agents are evolving from simple conversational tools into intelligent systems capable of independently managing complex banking functions such as fraud detection, compliance checks, underwriting decisions, and portfolio monitoring.
As financial institutions generate and consume unprecedented volumes of structured and unstructured data, traditional risk processes are hitting their limits. AI and Machine Learning models thrive in this environment, analyzing millions of data points in real time, identifying subtle patterns, and linking signals across supply chains, filings, behavior, and transactions.
This matters because several recent frauds, such as First Brands, Tricolour, and Broadband Telecom, slipped through because conventional checks were either missed or avoided. AI-driven engines, however, can examine financial footprints, GST trails, network linkages, and transaction behavior continuously, allowing lenders to detect early stress signals long before they escalate.
The outcome for banks and enterprises is game-changing: sharper onboarding decisions, continuous monitoring instead of periodic reviews, and far greater confidence in counterparties. Integrated into lending and trade workflows, these systems reduce operational risk, prevent surprises, and enable a smoother, more reliable flow of credit across the ecosystem.
Trend 2: Digital Trade Documents (MLETR) will Open New Trade Corridors
While digitizing trade documents removes paperwork, it also removes friction across borders, counterparties, and financing flows.
Electronic Bills of Lading (eBLs), a flagship MLETR use case, demonstrates how global trade corridors are increasingly ready to operate digitally. The bottleneck today is not the paper itself but the delays it introduces: printing, stamping, scanning, courier timings, and repeated data entry at each handoff. Even small delays can hold up shipments and financing for days.
MLETR changes this dynamic. By granting digital BLs, promissory notes and warehouse receipts full legal equivalence, the same document can move through the chain in seconds. Banks can verify authenticity instantly, logistics providers can release goods faster, and importers can unlock financing without waiting for physical originals to arrive.
The broader impact is significant. According to the Asia-Pacific Economic Cooperation (APEC), MLETR adoption and paperless trade measures could deliver up to US$2.0 trillion in GDP gains between 2024–2033, driven by cost savings as well as by higher trade volumes, employment, and wages. Although only a limited number of jurisdictions have formally adopted MLETR so far, corridor-based digitization between major trading partners offers a practical route to unlock these benefits quickly.
As adoption picks up, the real opportunity lies in platforms that seamlessly connect banks, traders and logistics networks, enabling digital BLs, e-notes, and compliance checks to flow through supply chains as effortlessly as data does today.
Trend 3: Deposit Tokens Are Emerging as the New Institutional Settlement Rails
Deposit-backed digital tokens are creating 24/7 settlement rails with instant reconciliation and on-chain liquidity for institutional transactions.
Several leading banks, JPMorgan, Citi, DBS, OCBC, and others, are piloting deposit tokens, a new form of digital money that sits on a blockchain but is fully backed by deposits held at commercial banks. A useful analogy is to think of deposit tokens like “tokenized bank balances.” Instead of waiting for end-of-day batch processing or reconciliation across multiple ledgers, the value moves instantly on-chain. If two institutions need to settle a large trade after business hours, a deposit token can move between them directly, with settlement finality in seconds and automatic recording of the transfer on a shared ledger. No cut-off times, no manual reconciliation, no multi-bank settlement lag.
Tokenization is gaining real momentum! The World Economic Forum estimates that 10% of global GDP could be tokenized on blockchain by 2027, signaling a shift toward digital-native financial infrastructure.
As adoption grows, the real opportunity will lie in platforms that can plug directly into these token-based rails, giving banks, NBFCs and large enterprises the ability to settle, reconcile, and manage liquidity in real time, without rewriting their entire systems.
Trend 4: Tokenization of Real-World Assets (RWA) Is Moving Into the Mainstream
The tokenization of assets like private credit, bonds, real estate, and receivables is accelerating, driven by clearer regulations and early-mover initiatives in major financial centers.
Globally, the value of tokenized Real-World Assets on-chain has already crossed $36.11 billion, reflecting how quickly this shift is moving from theory to adoption. While deposit tokens represent digital versions of bank money, the tokenization of Real-World Assets (RWA) converts actual assets, such as a property, a credit receivable, a bond, or an equipment lease, into digital tokens that can be issued, traded, or financed on a blockchain. This approach allows fractional ownership and supports global trade, broadening market access, enhancing transparency, and streamlining settlements through smart contracts.
For example, instead of selling a commercial property as one large, indivisible asset, it can be broken into thousands of digital tokens. Each token represents a fractional claim, similar to owning a “slice” of the building. These tokens can then be bought, sold, or used as collateral instantly, without the heavy legal and transactional machinery traditionally required.
In India, regulators are actively exploring tokenization at scale. The Reserve Bank of India has conceptualized the Unified Markets Interface (UMI) – a next-generation financial market infrastructure capable of tokenizing financial assets and settlements using wholesale CBDC. Early pilots, including the issuance of Certificates of Deposit, are already showing efficiency gains. These initiatives also align with the broader Finternet vision taking shape globally, where interoperable digital financial networks support use cases such as cross-border collateral mobility, programmable settlement, and tokenized trade finance, allowing tokenized assets to move seamlessly across platforms, markets, and jurisdictions.
Private credit pools, trade receivables, and fixed-income instruments are among the earliest beneficiaries, as they are data-rich but traditionally illiquid. The advantages of tokenization are multifold: it speeds things up, strips out friction, and opens markets to more investors. Better yet, it brings real-time pricing and liquidity to assets that used to gather dust. The next frontier lies in platforms that connect issuance, servicing, valuation, and trading, turning tokenized RWAs into a seamless lifecycle rather than a technical experiment.
Trend 5: CBDCs and Regulated Stablecoins Will Become the New Rails for Cross-Border Payments
Central Bank Digital Currencies and regulated stablecoins are emerging as the next-generation infrastructure for international money movement, offering the speed and programmability of blockchain without the volatility.
Global trade still relies on fragmented payment pathways where a single cross-border transfer may pass through multiple intermediaries, each adding delays, fees, and reconciliation challenges. As economies become more interconnected and digital, this legacy architecture is proving increasingly unfit for purpose.
CBDCs, digital versions of national currencies issued by central banks, and regulated stablecoins such as USDC, PYUSD and EURCV, are gaining momentum as practical alternatives. Fully backed by fiat reserves or government authority, they retain the stability of traditional money while operating on faster, more transparent digital rails.
A CBDC is like the digital version of cash in a wallet, only instead of holding paper notes, they would be held in a secure digital form issued directly by the central bank. For example, if India allows the cross-border use of it CBDC e-rupee, sending ₹10,000 to a supplier in Singapore would be as quick as sending a text message. The funds would move instantly from the digital wallet of the Indian entity to the Singaporean supplier, without banks needing to reconcile ledgers overnight or route payments across multiple countries.
A regulated stablecoin is a digital token backed 1:1 by real-world assets such as dollars, euros or short-term government bonds. Each token is redeemable for the underlying currency, which keeps its value steady.
This is very different from cryptocurrencies like Bitcoin or Ether, whose prices fluctuate sharply because they are driven by market speculation. Stablecoins are designed for payments and liquidity, not investment swings, making them far more suitable for trade, treasury flows and cross-border commerce.
For cross-border trade, the advantages are compelling: instant settlement instead of multi-day waits, lower costs from reduced intermediation, and real-time visibility that strengthens compliance and auditability. Their programmability also enables automated release of funds upon delivery, milestone-based payments, and seamless treasury operations across time zones. According to a global EY survey, among corporate users, 41% have realized 10%+ cost savings through stablecoins compared with traditional methods. Financial institutions now anticipate that by 2030, stablecoins could account for 5%–10% of global payments or US$2.1 trillion to US$4.2 trillion in value.
With regulators in the EU, US, Singapore, UAE and Hong Kong accelerating pilots and frameworks, the shift from experiments to real-world adoption is now firmly underway. As adoption scales, the next wave of value will lie in platforms that can natively support CBDC and stablecoin-based payouts, collections and invoice financing, especially across high-volume corridors.
Trend 6: Interoperability Standards Will Connect Documents, Money & Assets Across Chains
As trade documents, digital money, and tokenized assets scale, the next frontier is interoperability, enabling seamless movement across blockchains, networks, and settlement systems.
The past few trends point toward a clear direction: trade documents are going digital (MLETR), money is going digital (CBDCs, deposit tokens, stablecoins), and assets are going digital (RWA tokenization). However, each of these developments are advancing individually Their full potential will be realized only when they can work together.
Imagine an exporter whose digital bill of lading is issued on a permissioned blockchain used by shipping lines. Their buyer wants to pay using a CBDC issued on a central bank rail. Their financier operates on a separate network that uses deposit tokens. Today, these systems are isolated. With interoperability standards, the document, the money, and the financing asset can flow across networks as easily as sending an email, each retaining its identity, compliance checks, and settlement finality.
This shift enables a vision of liquidity that moves continuously, within the safeguards and settlement rules that financial systems already rely on, across multiple digital asset networks, not trapped inside any single platform. For institutions, this means they can choose their preferred settlement rail (CBDC, deposit token, stablecoin, or even RTP/UPI equivalents) without changing their workflows. The need in the future will be to create a connective layer that makes these networks work together, letting businesses pick their preferred rails without changing how they operate.
Trend 7: On-Chain Identity Will Enable Trusted, Automated Financial Transactions
On-chain identity frameworks provide secure, reusable, and tamper-proof credentials, enabling instant verification, automated compliance, and faster financial workflows.
On-chain identity refers to identity credentials (KYC documents, licenses, corporate filings or GST data) that are verified once and then stored securely on a blockchain or cryptographically anchored to it. Instead of relying on centralized databases that can be hacked or altered, businesses hold their own Verifiable Credentials (VCs) and Decentralized Identifiers (DIDs), which can be shared instantly with any counterparty. The Verifiable Legal Entity Identifier (vLEI) enhances this by acting as a digitally verifiable passport for organizations, ensuring that their legal identity and official roles can be authenticated on-chain. Built on Self-Sovereign Identity (SSI) principles and VCs, the vLEI enables decentralized, tamper-proof, and universally trusted organizational identification.
Let’s say, a supplier in Coimbatore wants to onboard with three different lenders. Today, each lender collects the same PAN, GST, bank statements and registration documents separately, repeating checks, validations and manual reviews every time. With on-chain identity, the supplier completes KYC/KYB once. A verified credential is issued, like a digitally stamped envelope that can’t be forged. Now any lender can instantly verify authenticity with a single click, without asking the supplier to resubmit documents or waiting for back-office checks.
This changes the economics of trade finance. On-chain credentials slash onboarding times for exporters, importers, and MSMEs, reduce fraud risk, and make compliance rules programmable. For example, a lender can automatically approve disbursement only if the counterparty’s credential shows an active GST registration, a valid Importer Exporter Code (IEC), or a sanctioned-party screening passed in real time.
As governments and financial institutions adopt DIDs and verifiable credentials, identity will become portable, interoperable, and instantly verifiable. This will help in embedding on-chain identity directly into onboarding, credit assessment, supplier verification, export workflows, and supply chain finance platforms, turning slow, document-heavy processes into automated, risk-aware digital flows.
Trend 8. ESG Becomes a Core Driver of Financing Decisions
ESG performance is shifting from a compliance exercise to a financial determinant, influencing lending terms, investor interest, and export competitiveness.
With India’s Carbon Credit Trading Scheme (CCTS) set to go live in 2026 and SEBI’s BRSR requirements strengthening disclosure norms, sustainability performance is now directly influencing lending rates, credit ratings, investor appetite, and even export competitiveness. Sustainable debt in India has already crossed USD 55.9 billion, showing clear investor demand for verifiable sustainability metrics.
In practical terms, verified ESG data is becoming a financial input, just like revenue, cash flows, or collateral. Companies with strong ESG metrics are already able to access cheaper capital. For example, Larsen & Toubro’s ₹500 crore ESG bond, priced at 6.35%, came in below comparable traditional instruments, demonstrating the “greenium” that transparent sustainability data can unlock. At the same time, banks, insurers, and trade-finance providers are increasingly adjusting pricing, risk premiums, and capital allocation based on a borrower’s ESG profile.
This shift is creating a new class of “ESG-linked finance,” where carbon intensity, supply-chain traceability, and sustainability reporting directly impact the cost and availability of capital. Increasingly, lenders and investors are also using ESG impact checks across the supply chain, assessing upstream and downstream sustainability practices to better evaluate risk and exposure. Firms that integrate credible ESG data into their finance systems will be best positioned to benefit as sustainable finance becomes mainstream.
The future certainly looks green. Embedding reliable ESG data flows into treasury, credit assessment, and financial planning systems will unlock lower-cost capital, meet evolving regulatory expectations, and strengthen long-term risk management.
Trend 9: Private Credit Will Unlock Liquidity and Narrow India’s MSME Funding Gap
Trade Receivables Securitization (TRS) is gaining adoption in private credit in India, converting verified invoices into short-term, investable instruments.
Private credit refers to loans or credit extended directly by non-bank investors, like funds or institutional investors, rather than through traditional banks. It is often faster, more flexible, and can target niche markets that banks may underserve. In India, private credit is growing rapidly, and Trade Receivables Securitization (TRS) is one of the leading examples.
TRS helps suppliers get paid for invoices immediately instead of waiting 60–90 days, without adding debt to their balance sheets. In this mechanism, invoices are pooled into a legally separate special-purpose vehicle, which raises funds by selling slices of the pooled invoices to investors. payments are distributed according to a priority structure, known as a waterfall, ensuring the safest investors are paid first. As the special-purpose entity is independent, the invoices do not appear on the seller’s balance sheet.
Essentially, TRS pools short-term invoices from reliable buyers into a single investment product. Verified invoices linked to strong anchors often produce low-risk, fast-turnover returns.
With a mechanism like TRS, MSMEs get faster cash, buyers strengthen supply chains without stretching their own credit, investors access short-term, transparent assets, and Supply Chain Finance platforms can finance more suppliers, reduce single-lender limits, and accelerate liquidity across the value chain. As more buyers participate and digital infrastructure matures, TRS has great potential to narrow India’s MSME funding gap and channel private capital efficiently into real economic growth.
Trend 10: Partnerships Will Power the Next Wave of Growth in Trade Finance
The future of trade finance will be built through collaboration, not competition, as banks, NBFCs, fintechs, and digital marketplaces join forces to deliver faster, broader, and more efficient access to working capital.
Trade finance has always been fragmented: multiple lenders, disconnected systems, manual checks, and MSMEs stuck navigating each relationship separately. The rise of strategic partnerships across the ecosystem is shaking things up. Banks bring liquidity, trust, and regulatory infrastructure. Fintechs contribute speed, automation, and superior digital workflows, while marketplaces like TReDS and ITFS aggregate buyers, sellers, and financiers on one network.
Here’s how they work together: a small auto-parts supplier in Pune traditionally depended on one bank that often took weeks to process invoices. Today, that same supplier can upload invoices on a marketplace that connects them to multiple banks and NBFCs simultaneously. Fintech rails verify documents instantly, banks price risk in minutes, and funds flow the same day, because each partner handles the part, they are best at.
Thus, partnership-driven models are resolving the long-standing pain points of trade finance by:
- Expanding reach: Fintechs and NBFCs help banks serve smaller, underserved MSMEs without building new infrastructure.
- Enabling platform-based lending: Marketplaces pool invoices, letting financiers underwrite risk at scale.
- Accelerating automation: Shared digital rails reduce manual checks, reconciliation bottlenecks, and approval delays.
Consequently, MSMEs gain faster, more reliable access to liquidity. Banks and NBFCs expand portfolios efficiently. Marketplaces and fintechs scale with richer data and deeper integration into supply chains.
The result is a more connected, more inclusive trade finance landscape, powered not by any single institution, but by the strength of the network.
Leadership Imperative
The momentum behind these shifts is pushing India toward a financial system built on intelligence, real-time connectivity, and verifiable trust. The leaders who adapt early will influence how trade flows, credit is delivered, and capital is deployed. The future belongs to platforms designed for instant transactions, authenticated identities, digital-first documents, and liquidity that move with digital speed.