India Launches Tokenization Pilot for Corporate Bonds and Digital Settlement

The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) have launched a pilot project called 'Demat 2.0' to test tokenized corporate bonds and faster settlement using blockchain technology and central bank digital currency.

The pilot, which began with three issuances including a Rs 500 crore Larsen & Toubro issue backed by investors such as SBI, Axis Bank, SBI Mutual Fund, and NSDL, aims to integrate the security and settlement sides of transactions more closely while speeding up settlement and automating parts of asset servicing.

SEBI Chairman Tuhin Kanta Pandey said that the framework would maintain legal certainty over ownership while introducing new market infrastructure. The model could later be applied to equities, mutual funds, and gold, while commercial papers and certificates of deposit already use tokenized forms through the unified markets interface and CBDC.

The RBI is also developing digital public infrastructure such as the ULI, which provides common rails for consent-based credit delivery in a model similar to the Unified Payments Interface.