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SEBI launches Demat 2.0 pilot for tokenized corporate bonds

By Markets Desk · 2026-09-11 · 1 min read
A digital network connecting to a physical certificate
Illustration: Tradingbird

Rs 1,025 crore in tokenized bonds have been issued under the new SEBI and RBI pilot framework.

The Securities and Exchange Board of India and the Reserve Bank of India launched the Demat 2.0 pilot on Thursday. The initiative tests distributed ledger technology for corporate bond settlement. Three issuers have already placed Rs 1,025 crore in these digital instruments.

The pilot uses the RBI's wholesale central bank digital currency for fund transfers. This structure enables atomic delivery-versus-payment settlement. The bond and the money move simultaneously to prevent default risk.

Three issuers lead the pilot

REC Limited issued Rs 500 crore on September 7, 2026. The bond carries a 7.30% coupon with an 18-month tenure. Fourteen investors participated in this specific issuance.

Larsen & Toubro issued Rs 500 crore on September 9, 2026. This instrument offers a 7.40% coupon over three years. Four investors purchased this tranche. IIFL issued Rs 25 crore on the same day with a 9.10% coupon.

Technology changes the settlement process

Demat 2.0 records ownership on a private distributed ledger. The token retains the bond's ISIN and legal rights. Depositories operate the ledger with support from NPCI. The depository remains the authoritative record holder.

Smart contracts automate coupon payments and redemptions. The system links the securities leg to the e-rupee wallet. This integration ensures that settlement occurs only when both parties fulfill their obligations.

Investor requirements remain largely unchanged

Investors do not need a new demat account. The tokenized holdings appear in the existing depository interface. Depositories manage the cryptographic keys on behalf of the investor.

Participants must open a CBDC wallet through their bank. The existing demat account links to this wallet with consent. Standard regulatory requirements for ratings and disclosure remain in force. GN auto markets/bonds: corporate bonds notes that the first phase involves institutional investors.

Based on reporting by GN auto markets/bonds: corporate bonds and Cointelegraph, compiled by the Tradingbird desk.

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