
India Tokenizes Corporate Bonds with Digital Rupee in Demat 2.0
The Securities and Exchange Board of India (SEBI) has launched the Demat 2.0 pilot, a significant initiative to tokenize corporate bonds and settle transactions using the Reserve Bank of India's wholesale digital rupee. This program utilizes a distributed ledger within a regulated framework to enable atomic delivery versus payment, effectively reducing settlement risk and manual reconciliation requirements. Three major issuers—REC, Larsen & Toubro, and IIFL Finance—have collectively issued ₹1,025 crore in tokenized bonds during the initial phase. By integrating smart contracts for automated interest payments and redemptions, the pilot aims to modernize India's financial infrastructure while maintaining strict regulatory oversight. Unlike open-market crypto initiatives, this project keeps assets within a permissioned environment involving key institutions like CDSL, NSDL, and major banks. The success of this pilot could pave the way for tokenizing other asset classes, including equities and mutual funds, within the Indian market. This development highlights a global trend where central banks and regulators explore blockchain-based efficiency without sacrificing control or security.









