Sebi’s Demat 2.0 lays groundwork for tokenising more regulated financial assets
RWA Signal Insight
InfrastructureThe Securities and Exchange Board of India (SEBI) has launched the 'Demat 2.0' pilot program to test distributed ledger technology (DLT) as a foundational layer for the corporate bond market. By integrating tokenized securities with the Reserve Bank of India’s wholesale digital rupee, the initiative enables atomic Delivery-versus-Payment (DvP) settlement, effectively eliminating the time gap between security transfer and cash payment. The pilot maintains the existing legal framework of corporate bonds, including ISINs and investor rights, while utilizing private, permissioned DLT networks operated by depositories. This infrastructure shift allows for the automation of corporate actions like coupon payments and redemptions through smart contracts. Although the current pilot is limited to a ₹1,025 crore scope, it serves as a critical proof-of-concept for the broader tokenization of regulated financial assets in India. Industry experts view this as a strategic application of India's Digital Public Infrastructure playbook to modernize capital markets. The success of this initiative will ultimately depend on the development of secondary-market liquidity and the eventual expansion to retail participation.
Key points
- SEBI's Demat 2.0 pilot uses DLT to enable atomic DvP for corporate bonds.
- The initiative integrates tokenized securities with the RBI’s wholesale digital rupee (CBDC).
- Smart contracts automate corporate actions like coupon payments and bond redemptions.
- The pilot currently covers a ₹1,025 crore volume within a $620 billion market.
Background
SEBI is the primary regulatory body for the securities market in India, responsible for protecting investor interests and promoting the development of the capital markets. The Reserve Bank of India (RBI) manages the country's monetary policy and has been actively developing a Central Bank Digital Currency (CBDC) to modernize payment systems. Together, these institutions are leveraging India's existing Digital Public Infrastructure to integrate blockchain-based efficiencies into traditional financial systems.