SEBI and the Reserve Bank of India launched the Demat 2.0 pilot for tokenised corporate bonds at the Global Fintech Fest in Mumbai on Thursday. The initiative, announced by RBI Governor Sanjay Malhotra and SEBI Chairman Tuhin Kanta Pandey, tests issuing, holding, trading, and settling corporate bonds using distributed ledger technology (DLT) with the RBI’s wholesale central bank digital currency (CBDC) for transaction settlements. Three issuers have already issued Rs 1,025 crore of tokenised bonds under the pilot, according to medianama.com.
The pilot replaces the conventional demat system, which records ownership through a database, with a private, permissioned DLT network operated by market infrastructure institutions. The tokenised bonds retain all legal and regulatory characteristics, including ISIN, coupon, maturity, covenants, rating, security, and investor rights. The ledger is shared and updated by authorized participants, enabling a more efficient and transparent process. The RBI’s wholesale CBDC is used for the funds leg of transactions, integrating digital currency with bond trading.
This pilot is significant as it does not create a new asset class but changes the technology behind ownership and settlement of corporate bonds. By using DLT and CBDC, the initiative aims to enhance transparency, reduce settlement times, and lower costs. The move aligns with global trends where regulators explore blockchain for financial instruments. The involvement of major issuers like REC, Larsen & Toubro, and IIFL underscores the pilot’s scale and potential impact on India’s bond market infrastructure.
The pilot has already seen tokenised bonds worth Rs 1,025 crore issued by three companies, marking a concrete step in modernizing India’s bond market. The RBI and SEBI will monitor the pilot’s outcomes before considering wider adoption, with further updates expected after the pilot phase concludes.