Indian firms issue 10.25 billion rupees of tokenised bonds in regulator’s pilot scheme

Three Indian financial service providers have successfully issued 10.25 billion rupees, equivalent to approximately US$103 million, in tokenised corporate bonds as part of a pilot program overseen by the Securities and Exchange Board of India (Sebi). Known as Demat 2.0, this initiative utilizes distributed ledger technology to manage the issuance, holding, and settlement of these digital assets. A critical feature of the program is its integration with the Reserve Bank of India’s wholesale central bank digital currency, which enables simultaneous delivery-versus-payment settlement. By leveraging smart contracts, the system automates interest and redemption payments while significantly reducing transaction times from several days to same-day settlement. This shift is expected to lower administrative costs and reconciliation burdens for market participants while maintaining existing regulatory standards for credit ratings and investor protections. Sebi plans to expand the pilot in future phases to include secondary market trading via request-for-quote platforms and eventually open participation to retail investors. This development marks a significant step in the modernization of India's capital markets through blockchain-based infrastructure.