India Begins Tokenizing Its $620 Billion Corporate Bond Market

In brief

• India's securities regulator SEBI, alongside the RBI, launched "Demat 2.0," a pilot to issue and settle corporate bonds as digital tokens on a permissioned ledger run by depositories NSDL and CDSL, targeting a $620 billion market.
• Three issuers—REC, Larsen & Toubro and IIFL Finance—have raised a combined 1,025 crore rupees (~$107 million); the system links to the RBI's wholesale digital rupee for atomic settlement, with smart contracts automating interest and redemptions.
• The bonds keep their legal terms, ratings and investor protections, with secondary trading and retail access planned for later phases.

India has launched a pilot to issue and settle corporate bonds as blockchain tokens, an early move to bring distributed-ledger technology into a $620 billion market using the country's digital rupee.

The Securities and Exchange Board of India unveiled the program, dubbed "Demat 2.0," last week alongside the Reserve Bank of India, with SEBI Chairman Tuhin Kanta Pandey and RBI Governor Sanjay Malhotra presenting it at the Global Fintech Fest.

Under the system, a corporate bond is issued as a native digital token on a private, permissioned ledger operated by India's statutory depositories, NSDL and CDSL.