Tokenization in India: Demat 2.0, e-Rupee, and RBI’s Line Explained
RWA Signal Insight
InfrastructureThe Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) launched the Demat 2.0 pilot on September 10, 2026, to modernize the issuance and settlement of corporate bonds. This initiative utilizes shared ledger technology to issue tokenized bonds that maintain their original legal status while enabling atomic settlement via the wholesale e-Rupee. By linking the bond transfer and payment on the same ledger, the system eliminates settlement risk, ensuring that transactions either complete simultaneously or not at all. The pilot focuses on large firms initially, with SEBI confirming that no separate exchange will be created, as existing trading channels will remain the primary venue for price discovery. RBI Governor Sanjay Malhotra emphasized that while the central bank remains cautious regarding private cryptocurrencies, it strongly supports the underlying distributed ledger technology to enhance monetary efficiency. This development represents a significant shift in India's financial infrastructure, prioritizing regulated, central bank-backed digital assets over decentralized crypto alternatives. The project underscores a strategic move to integrate programmable money into traditional securities markets while maintaining strict regulatory oversight.
Key points
- SEBI and RBI launched the Demat 2.0 pilot on September 10, 2026.
- Atomic settlement for corporate bonds is achieved using the wholesale e-Rupee.
- The pilot utilizes shared ledger technology without creating a new secondary exchange.
- RBI supports tokenization and DLT while maintaining a cautious stance on private crypto.
Background
The e-Rupee is India's Central Bank Digital Currency (CBDC), issued by the Reserve Bank of India in both wholesale and retail versions. It is designed to function as a digital equivalent of physical cash, facilitating secure, real-time settlement for financial institutions and consumers. The wholesale variant is specifically engineered to streamline interbank settlements and high-value transactions within the regulated financial ecosystem.