India's Tokenized Bond Pilot Draws $107M from Three Issuers
India has taken a significant step in its financial technology development by launching a tokenized corporate bond pilot. The Securities and Exchange Board of India (SEBI) said Demat 2.0 allows corporate bonds to be issued and held as digital tokens on a distributed ledger owned by the country's statutory depositories.
The system connects to the Reserve Bank of India's (RBI) wholesale central bank digital currency (CBDC) through its Unified Market Interface. Three companies have already participated in the pilot, with REC raising 5 billion rupees from 18 investors on Monday, Larsen & Toubro (L&T) raising another 5 billion rupees from four investors on Wednesday, and non-bank lender IIFL issuing 250 million rupees in bonds to one investor.
The regulator said the infrastructure allows issuers to receive funds on the day of bidding instead of two to three days later. Atomic settlement removes the delay between the movement of money and bonds, while smart contracts can automate interest and redemption payments.