India’s Smart Cities Mission concluded in March 2025 after a decade that saw Rs 1.6 lakh crore spent on over 8,000 projects in 100 cities. It was an important start, but only that. The biggest challenge now lies in the future. By 2030, nearly 600 million Indians are expected to live in urban areas, and another 400 million are expected to be added over the next two decades. The Urban Challenge Fund, notified in April 2026, has already indicated where policy attention should shift: towards tier II and III cities and towards projects that are able to financially support themselves. The Center alone cannot bear a challenge of this magnitude, and policymakers are increasingly looking for new models for building and operating public infrastructure.
One answer is taking shape in the world of virtual digital assets. It’s called DePIN (Decentralized Physical Infrastructure Networking). The easiest way to understand the idea is through one of the oldest and most famous examples – Filecoin.
Today, most people rely on companies like Google or Amazon to store photos, emails, and files on their servers. Filecoin turns this model on its head. A small business in Pune that has spare space on its hard drive can connect to the Filecoin network and make that space available to users anywhere in the world. Every file stored on its drive is recorded in a shared digital ledger, and the company must prove every few hours that the file remains safely stored. If this happens, you will earn FIL – Filecoin’s native digital token. If the data is lost, part of the deposit she should have made will be docked.
On the other side are the customers – universities, media companies, government archives – who pay at FIL to store their data, often at prices much lower than those charged by the larger cloud providers. The Pune-based company can then sell the FIL it earns on cryptocurrency exchanges where the token is actively traded and convert the proceeds into rupees. There’s no middleman, no central cloud — just software that matches those who have spare capacity with those who need it.
The research firm that coined the term DePIN describes them as networks that use cryptocurrency-based rewards to build and manage real-world infrastructure through public participation rather than a single company. Simply put, instead of one company owning all the hard drives, hotspots, or sensors, thousands of ordinary people contribute devices from their homes, shops, or rooftops, while blockchain technology maintains a tamper-proof record of who supplied what. Contributors are rewarded with tokens – a form of digital money that can later be sold on cryptocurrency exchanges for rupees or dollars.
The sector’s market size was estimated at more than $50 billion in 2024, and the World Economic Forum expects it to grow to $3.5 trillion by 2028.
This same pattern works across some of the largest DePIN networks operating today. Helium has more than 400,000 community-managed wireless hotspots in 80 countries and serves more than 1 million 5G users daily. In San Jose, California, the network is used to power parking, water and air quality sensors at a cost of about $1 per sensor per year. Hivemapper, a cryptocurrency-backed alternative to Google Maps, has mapped hundreds of millions of kilometers using driving cameras fitted to regular cars.
India has also entered the space. Wifi Dabba, backed by Y Combinator and Multicoin Capital, is paying the country’s local cable operators $1.5 lakh in tokens to power the hotspots and has already deployed nearly 14,000 of them, targeting the 44 per cent of Indians who do not have reliable internet access. More than 800 community-owned WeatherXM stations now operate on that network, sending area-level precipitation and temperature data to farmers, schools and insurance companies.
It is easy to see how such systems will be beneficial for India’s next 500 cities. Indore’s IoT-enabled bins have reduced waste collection trips by almost a third. Similar systems could operate in cities like Jhansi or Warangal without relying entirely on central government funding, with shopkeepers hosting sensors in exchange for tokens. Prime Minister Surya Ghar’s rooftop solar systems, powered by the DePIN network, could allow households to sell surplus electricity to neighbors in near real-time. Likewise, a network of community-owned flood sensors can warn parts of Mumbai before the next monsoon rather than after.
However, there are real limitations such as DoT spectrum rules, BIS hardware certification requirements, and token price volatility among them. However, India remains better placed than many countries in experimenting with such systems. Forty-nine exchanges are now registered with FIU-IND under the PMLA, and the compliance architecture the sector has built – including KYC standards, the Travel Rule, and Suspicious Transaction Reports (STRs) – is precisely the kind of framework a municipal body or disco might require before engaging with a token-based operator.
India has reimagined payments through UPI and identity through Aadhaar. Rewiring how the next 500 cities are measured and monitored may be the next logical step, and with the right regulatory scaffolding, the cryptocurrency sector could play a useful role. DePIN will not replace the state. But for upcoming cities, it may be the multiplier that finally makes the numbers add up.
Disclaimer: The views expressed in this article are those of the author/s and do not necessarily reflect the views of ET Edge Insights, its management or members.
