India Unveils Blockchain-Powered Corporate Bond Settlement System
India has taken another step in its journey to integrate blockchain technology into traditional financial markets. The Securities and Exchange Board of India launched Demat 2.0, a pilot program that allows corporate bonds to be issued as digital tokens on a distributed ledger run by regulated market institutions.
The pilot connects the tokenized bond ledger with the Reserve Bank of India's wholesale digital rupee through its Unified Market Interface. This allows the bond and the money used to buy it to move together, reducing settlement risk between the two sides of a trade.
Three companies have already raised funds through this system: REC, Larsen & Toubro, and IIFL Finance. The bonds themselves remain conventional, with fixed interest rates, maturity dates, and investor rights.