India Pilots Blockchain Tokens for $620 Billion Corporate Bond Market
India has launched a pilot to issue and settle corporate bonds as blockchain tokens. The Securities and Exchange Board of India, or SEBI, unveiled the program, called 'Demat 2.0,' alongside the Reserve Bank of India, with the goal of bringing distributed-ledger technology into its $620 billion corporate bond market.
The system links to the RBI's wholesale digital rupee for atomic settlement, allowing issuers to receive proceeds on the same day as issuance, rather than days later. Smart contracts automate interest payments and redemptions. Three companies have already used the framework: REC raised 500 crore rupees (~$54 million) from 18 investors on September 7; Larsen & Toubro followed with another 500 crore rupees; and IIFL Finance raised 25 crore rupees.
The bonds retain their legal terms, ratings, and investor protections, according to SEBI. Later phases are set to introduce secondary trading and eventually retail access. Investors can hold the tokens in existing Demat accounts without undergoing fresh know-your-customer checks.