India has taken a major step toward modernizing its financial infrastructure, launching a pilot program that issues corporate bonds as digital tokens and settles them using the country's wholesale central bank digital currency. The initiative targets a corporate bond market valued at roughly $620 billion.
Inside the Demat 2.0 Pilot
The program, dubbed "Demat 2.0," is a joint effort between the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI). It represents a coordinated push by the country's top financial regulators to bring blockchain-based tokenization into mainstream debt markets.
Under the pilot, corporate bonds are issued as digital tokens rather than traditional securities. Settlement is handled through the wholesale digital rupee, the RBI's central bank digital currency designed for institutional and interbank transactions. That combination aims to streamline the entire lifecycle of a bond, from issuance to settlement.
India is turning one of the world's largest debt markets into a live testing ground for tokenized finance.
Early results suggest interest from issuers. Three companies have already tapped the system to raise approximately $107 million, signaling that the tokenized approach can attract real capital rather than remaining a theoretical experiment.
Why Tokenization Matters
Tokenizing bonds and settling them with a digital currency can reduce the friction, delays, and intermediary costs that typically accompany traditional bond transactions. By representing debt instruments as digital tokens, regulators hope to unlock faster settlement and greater transparency across the market.
The move also positions India among a growing group of nations experimenting with tokenized real-world assets and central bank digital currencies. As the technology matures, supporters argue it could reshape how large-scale debt markets operate.
Key features of the pilot include:
- Corporate bonds issued as blockchain-based digital tokens
- Settlement conducted using the wholesale digital rupee
- Roughly $107 million raised by three participating companies
If the pilot proves successful, it could pave the way for broader adoption across India's vast corporate bond market, offering a template for how tokenization and CBDCs might work together at scale.