SEBI launches tokenised corporate bond pilot under Demat 2.0, three issuers already testing the system

The Securities and Exchange Board of India (SEBI) has initiated a pilot program for tokenized corporate bonds under its 'Demat 2.0' framework. This initiative aims to modernize the settlement and issuance process for debt securities by leveraging blockchain-based tokenization to enhance transparency and efficiency. Three issuers are currently participating in the testing phase to evaluate the system's operational viability within the Indian financial market. By moving toward a tokenized infrastructure, SEBI seeks to reduce settlement cycles and minimize the administrative overhead associated with traditional dematerialized securities. This development represents a significant regulatory push toward integrating distributed ledger technology into mainstream capital markets. The pilot serves as a critical step in digitizing the lifecycle of corporate debt, potentially setting a precedent for broader asset tokenization in India. Successful implementation could lead to increased liquidity and broader investor access to corporate bond markets.