India Launches Tokenized Corporate Bond Pilot in $620 Billion Market
India has initiated a pilot program to tokenize its corporate bond market using blockchain technology, with the goal of integrating distributed-ledger systems into a $620 billion sector. The initiative, named 'Demat 2.0,' was launched by India's Securities and Exchange Board (SEBI) in collaboration with the Reserve Bank of India (RBI). Three companies—REC Limited, Larsen & Toubro, and IIFL Finance—have already issued tokenized bonds under this framework, collectively raising approximately $107 million. The system uses a private blockchain operated by NSDL and CDSL to issue tokens representing corporate debt. The pilot enables atomic settlement via the RBI's wholesale digital rupee through an interface called Unified Market Interface, allowing for near-instant transaction settlements between bonds and payments. Smart contracts are also being used to automate interest and redemption processes while maintaining existing legal frameworks such as credit ratings and investor protections. SEBI emphasized that tokenization does not alter these fundamentals but enhances efficiency. The initiative aligns with India's broader strategy of leveraging blockchain technology for financial inclusion, particularly through the digital rupee rollout.
Topics: blockchain corporate bonds Demat 2.0 digital rupee India's financial market