India Issues Corporate Bonds as Digital Tokens with Central Bank-Backed Settlement
India has quietly launched a pilot program called Demat 2.0, which issues corporate bonds as digital tokens on a distributed ledger settled entirely with the Reserve Bank of India's wholesale digital rupee.
The Securities and Exchange Board of India (SEBI) launched this program on September 11, 2026, targeting India's entire $620 billion corporate bond market. Three companies issued tokenized bonds worth a combined $107 million in the first week, exceeding expectations.
Demat 2.0 changes the traditional bond-issuing process by creating digital tokens on a blockchain maintained by regulated depositories, allowing payment through the RBI's wholesale digital rupee. The key innovation is the 'Unified Market Interface' that connects the tokenized bond ledger with the RBI's digital rupee system for atomic settlement.
The pilot has attracted 23 investors and ₹1,025 crore (~$107 million), with a notable mix of issuers including state-owned and private companies. India rejected using public blockchains and stablecoins for settlement, opting instead for central bank money through regulated depositories.