India Launches $620B Tokenized Bond Experiment Using Digital Rupee

The Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) have launched 'Demat 2.0,' a pilot program designed to test the issuance and settlement of tokenized corporate bonds on a distributed ledger. This initiative integrates blockchain technology with India's existing statutory depositories and the wholesale digital rupee (CBDC) to facilitate atomic delivery-versus-payment. By enabling simultaneous bond transfer and settlement, the system aims to significantly reduce transaction risks and increase operational efficiency within India's $620 billion corporate bond market. The first phase of the pilot has already successfully facilitated the issuance of ₹1,025 crore ($116 million) in tokenized bonds by REC, Larsen & Toubro, and IIFL Finance. These digital assets maintain standard coupon rates and investor rights while remaining accessible through existing Demat accounts. This development marks a significant milestone as India becomes the first nation to combine natively issued DLT bonds with CBDC settlement within a regulated market framework. The experiment serves as a critical real-world test for scaling blockchain infrastructure in national financial systems, with future plans to include secondary market trading and retail investor access.