India's SEBI Demat 2.0 Pilot Launches With Over $100M in Tokenized Bonds

India’s Securities and Exchange Board of India announced the launch of its Demat 2.0 pilot for tokenized corporate bonds on September 10, testing issuance, holding, trading and settlement on a private permissioned distributed ledger. The programme’s initial reported bond issuance totalled ₹1,025 crore, or approximately $107.2 million, from three companies.

The pilot connects tokenized securities to the Reserve Bank of India’s wholesale central bank digital currency for settlement, while SEBI’s rollout begins with institutional issuance rather than retail trading.

₹1,025 Crore in Tokenized Bond Issuance

REC Ltd., Larsen & Toubro Ltd. and IIFL Finance raised the combined ₹1,025 crore through tokenized corporate bonds, according to The Block.

REC accounted for ₹500 crore of the total in an issuance dated September 7. L&T raised another ₹500 crore, while IIFL raised ₹25 crore, both dated September 9. The transactions occurred immediately before SEBI’s September 10 launch announcement.

The volume provides an early measure of activity around the institutional first stage, rather than evidence of a retail tokenized-bond market. SEBI has framed Demat 2.0 as a pilot that tests the core lifecycle of tokenized corporate bonds.

Wholesale CBDC and Atomic Settlement

Under the design set out by SEBI, the tokenized bonds are linked with the RBI’s wholesale CBDC for atomic delivery-versus-payment settlement.

In practical terms, the security and cash legs of a transaction settle together, or neither leg settles. The arrangement is being tested on a private, permissioned ledger rather than an open public blockchain.

SEBI’s announcement says the pilot covers issuance, holding, trading and settlement. The wholesale-CBDC link is the settlement mechanism being tested for the tokenized instruments.

Institutional Issuance Comes First

Demat 2.0 is planned as a three-stage rollout. Institutional issuance is first, followed by secondary-market trading and retail access; SEBI then envisages possible expansion to more regulated entities and instruments.

That sequencing means secondary trading and participation by retail investors are subsequent phases of the plan, not features established by the initial issuance activity. The regulator has not presented the first-stage pilot as a full retail trading launch.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.