The Securities and Exchange Board of India (SEBI) has announced the successful launch of ‘Demat 2.0’, a pilot project to test the tokenisation of corporate bonds. The announcement was made by RBI Governor Sanjay Malhotra and SEBI Chairman Tuhin Kanta Pandey at the Global Fintech Fest in Mumbai.
What is Demat 2.0?
Demat 2.0 is a new system that tests how corporate bonds can be issued, held, traded and settled using blockchain-based technology.
Under the pilot, corporate bonds are created as digital tokens on a shared electronic record called a distributed ledger. The ownership records are maintained by the country’s depositories.
The system is also connected to the RBI’s wholesale Central Bank Digital Currency (e₹). This allows the bond and payment to be transferred at the same time. This process is called atomic settlement.
Interest and redemption payments can also be automated through smart contracts. This means payments can be sent directly to bondholders’ e₹ wallets on the due date.
Key benefits
Demat 2.0 could make corporate bond transactions faster and more efficient.
- Issuers can receive funds on the same day as bidding instead of waiting 2–3 days.
- Automated processes could reduce the cost of issuing and servicing bonds.
- Intermediaries may have fewer reconciliation and verification tasks.
- Atomic settlement can remove settlement risk.
- Funds from secondary-market bond transactions can reach you immediately instead of taking 2–3 days.
- Interest and redemption payments can be credited automatically on the due date.
What makes India’s approach different?
Tokenisation projects have already been tested in countries such as Switzerland, Hong Kong and the US. However, SEBI said India is the first country where corporate bonds have been issued directly on a distributed ledger.
Ownership records are maintained by statutory depositories and settlement is done using central bank digital currency within the existing regulated market system.
Current status
Three companies have issued tokenised bonds so far, with total issuances of ₹1,025 crore. REC Limited was the first issuer on September 7, 2026. It raised ₹500 crore from 18 investors.
What does it mean for you?
Demat 2.0 is currently a pilot project and does not change how you buy or hold corporate bonds today. If the system is adopted on a larger scale, it could make corporate bond transactions faster, reduce settlement delays and automate interest and redemption payments.
