India’s financial regulators have launched a pilot programme to tokenise corporate bonds, integrating distributed ledger technology and the wholesale digital rupee to modernise bond issuance, settlement, and trading infrastructure.
India’s financial regulators have opened a pilot programme that could change how corporate bonds are issued, recorded and settled, as the Reserve Bank of India and the Securities and Exchange Board of India test a tokenised market infrastructure built around the wholesale digital rupee.
Unveiled at the Global Fintech Fest in Mumbai by Reserve Bank Governor Sanjay Malhotra and SEBI Chairman Tuhin Kanta Pandey, the initiative, known as Demat 2.0, places corporate bonds on a permissioned distributed ledger while keeping the legal characteristics of the securities unchanged. According to reports from Crowdfund Insider, LiveMint and Business Standard, the bonds retain the same ISIN, coupon, maturity, covenants and investor rights as conventional dematerialised debt, while ownership continues to sit within India’s existing depository framework. The difference is the technology used to record and transfer the asset.
The pilot also links the securities leg with payment through the central bank’s wholesale digital currency using the RBI’s Unified Market Interface, allowing the two sides of a trade to settle together. That so-called atomic settlement is intended to reduce the timing gaps and operational risk that can arise in traditional bond trades. The Indian Express reported that Pandey said the project is designed to test whether distributed ledger technology can speed up settlement and automate parts of asset servicing.
For now, the programme is limited to institutions, but officials plan to extend it in stages to secondary trading and eventually to retail investors. Early issuance has already begun, with Rural Electrification Corporation, Larsen & Toubro and IIFL Finance together raising ₹1,025 crore in the first phase, according to Crowdfund Insider and Business Standard. The broader aim is not to introduce a new kind of security, but to modernise the market plumbing behind a corporate bond market that remains large but relatively illiquid.
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