India’s securities and central bank regulators have started a pilot called Demat 2.0 that moves corporate bond issuance and settlement onto a permissioned distributed ledger, targeting a corporate debt market worth about $620 billion. Three companies — REC, Larsen & Toubro, and IIFL Finance — have already raised a combined 102.5 billion rupees, or about $1.07 billion, through the system. REC issued India’s first tokenized corporate bond on Sept. 7, raising 50 billion rupees. The setup links tokenized bonds with the Reserve Bank of India’s wholesale digital rupee and uses a unified market interface to enable simultaneous settlement of securities and funds. Smart contracts are also used to automate coupon payments and principal redemption. SEBI said tokenization does not change the bonds’ legal terms, credit ratings, or investor protection arrangements, and the framework may later be opened to secondary trading and retail participation.
India’s Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) have started a pilot program called Demat 2.0, bringing corporate bond issuance and settlement onto a permissioned distributed ledger. The initiative targets India’s corporate bond market, which is valued at about $620 billion.
Three issuers have already used the platform
So far, REC, Larsen & Toubro, and IIFL Finance have raised a combined 102.5 billion rupees, or about $1.07 billion, through the system.
REC issued India’s first tokenized corporate bond on Sept. 7, raising 50 billion rupees.
Linked to the wholesale digital rupee
The system connects tokenized bonds with the RBI’s wholesale central bank digital currency, or digital rupee. Through a unified market interface, it enables simultaneous settlement of bonds and funds, while smart contracts automatically handle interest payments and principal redemption.
SEBI says legal terms stay unchanged
According to SEBI, tokenization does not alter the bonds’ original legal terms, credit ratings, or investor protection mechanisms. The regulator also plans to later open the framework to secondary trading and retail investors.
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