CoinDesk
India's Securities and Exchange Board of India (SEBI) has launched Demat 2.0, a pilot that issues corporate bonds as blockchain tokens and settles both legs of each trade through the Reserve Bank of India's wholesale digital rupee. State-owned lender REC raised ₹500 crore (~$56M) through the system earlier this month, followed by Larsen & Toubro with another ₹500 crore and IIFL Finance with ₹25 crore (~$2.8M), for ₹1,025 crore combined in the first wave.
Why it matters
The pilot is the largest move yet by a major emerging market to bring tokenization inside the regulated perimeter. Rather than route corporate debt through open public chains, SEBI is anchoring it to the Demat electronic accounts Indian investors already use, then linking those tokens to a state-issued CBDC through the RBI's Unified Market Interface.
That linkage is the structural change. In conventional settlement, payment and delivery run on separate systems, and one leg can fail before the other. With a tokenized bond and digital rupee moving together, both legs settle atomically. Corporate actions like interest payments and redemptions can route through smart contracts in the same pass.
Market impact
The pilot targets a $620 billion corporate bond market that has historically struggled with slow settlement and thin secondary trading. REC's ₹500 crore issuance came at standard rates and maturity terms, signalling the goal is plumbing rather than pricing. Later phases will add secondary trading and widen access to retail investors.
India has stayed cautious toward private cryptocurrencies even as on-chain research firms regularly rank its population among the world's top adopters. Demat 2.0 makes the regulator's intent explicit: tokenization runs on the existing rails of banks, depositories and central-bank money, not on open chains competing with them.
Frequently asked questions
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What is India's Demat 2.0 pilot?
Demat 2.0 is a SEBI-backed pilot that issues Indian corporate bonds as blockchain-based tokens and settles each trade through the Reserve Bank of India's wholesale digital rupee, via the RBI's Unified Market Interface.
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Which companies have already issued bonds through Demat 2.0?
State-owned power-sector lender REC raised ₹500 crore (~$56M), engineering and construction firm Larsen & Toubro issued another ₹500 crore, and non-bank lender IIFL Finance sold ₹25 crore (~$2.8M), for ₹1,025 crore combined in the first wave.
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How does digital rupee settlement reduce risk on a bond trade?
The tokenized bond and the digital rupees used to buy it move together through the RBI's Unified Market Interface, so both legs settle atomically. That removes the delivery-versus-payment gap that exists when payment and securities clear on separate systems.
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Will retail investors be able to buy these tokenized bonds?
Not yet. The current phase covers primary issuance only. SEBI and the RBI have signalled that secondary-market trading and broader retail access will arrive in later phases of the pilot.
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How does this fit with India's cautious stance on private crypto?
India has stayed restrictive on private cryptocurrencies even as on-chain research firms rank its population among the world's top adopters. Demat 2.0 routes tokenization through banks, depositories and state-issued CBDC rather than open public chains.
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