Sebi Launches Demat 2.0 for Corporate Bond Tokenisation
India initiates a pilot for tokenised corporate bonds, settling transactions in central bank digital currency.
India has launched a pilot project for the tokenisation of corporate bonds. The initiative, named Demat 2.0, enables atomic settlement of these instruments. Three companies have already issued tokenised bonds under this framework. The total value of these initial issuances is 1,025 crore Indian rupees. The Securities and Exchange Board of India announced the launch alongside the Reserve Bank of India. This marks the first time corporate bonds have been issued natively on a distributed ledger in the country.
The system connects to the Reserve Bank of India’s wholesale central bank digital currency. Settlement occurs through the Unified Market Interface. Ownership records are maintained on a distributed ledger owned by statutory depositories. Smart contracts handle asset servicing, including interest payments and redemption. These instructions execute automatically on the ledger. Payment reaches bondholders' digital wallets on the due date without manual intervention.
UPI Innovations Enhance Payment Speed
The National Payments Corporation of India introduced two new features for the Unified Payments Interface. UPI Tap and Pay allows users to make payments via Near Field Communication. Users unlock their smartphone and tap it on a compatible terminal. The feature works without the user’s mobile data connection. It relies on the internet connection of the point-of-sale machine.
MyUPI is a customer support solution powered by the NPCI Small Language Model. It provides intelligent enhancements to the UPI Help platform. The tool aims to strengthen trust and safety within the ecosystem. It addresses convenience issues for consumers using the payment system.
Regulatory Framework Supports Digital Assets
The pilot is being rolled out in phases. Issuances under the first phase are currently ongoing. The structure improves efficiency in the securities market. It reduces errors in the issue, settlement, and servicing of bonds. The record of ownership remains within the existing regulated market infrastructure. This approach differs from global models where individual issuers often use separate platforms.
The announcement was made at the Global Fintech Fest. RBI Governor Sanjay Malhotra and Sebi Chairman Tuhin Kanta Pandey presented the initiatives. The move aligns with broader efforts to digitize financial infrastructure. The system ensures that funds move instantaneously with the bond. This reduces the risk of failed settlements in the corporate debt market.
