India has taken a major step towards digitalising the corporate bond market as the Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) launched a pilot for tokenised corporate bonds at the Global Fintech Fest 2026.
The RBI SEBI Tokenised Bonds pilot is being developed under the “Demat 2.0” initiative.
How RBI SEBI Tokenised Bonds Pilot Works
The pilot uses tokenisation, blockchain-based technology and RBI’s wholesale central bank digital currency (CBDC) to enable faster settlement of corporate bond transactions.
The system is designed to support atomic settlement, meaning the transfer of securities and funds can take place together rather than through separate processes.
Smart contracts will also be used for certain asset-servicing activities, including interest payments and redemptions.
This could reduce reconciliation work, speed up transactions and lower settlement-related risks in the corporate bond market.
The pilot currently covers tokenised corporate bonds issued by REC Limited, Larsen & Toubro and IIFL, with the combined value reported at ₹1,025 crore.
The initial phase is focused on institutional investors, while wider participation could be considered later.
What Is Demat 2.0 and Why It Matters
Demat 2.0 is intended to build on India’s existing dematerialised securities infrastructure by introducing tokenised assets and digital settlement mechanisms.
The initiative brings together securities-market infrastructure with CBDC-based settlement to test how digital technology can improve the way corporate bonds are issued, held and settled.
The move could make bond-market operations more efficient by reducing the need to reconcile separate records for securities and cash.
Tokenisation also creates a digital record of ownership on distributed-ledger infrastructure, while existing investor rights and compliance requirements continue to apply.
Who Is Participating in the Pilot
The initiative involves major financial-market institutions, including CDSL, NSDL, BSE, NSE, HDFC Bank, ICICI Bank and NPCI.
Their participation is aimed at testing the technology across different parts of India’s financial-market infrastructure.
The pilot follows earlier work on tokenised bonds. REC, for instance, raised ₹500 crore through a tokenised bond issue, with the transaction using RBI’s wholesale CBDC for settlement.
The issue carried a 7.30% coupon and attracted bids worth ₹796 crore, according to reports.
Could Tokenised Bonds Reach Retail Investors
The initial pilot is aimed at institutional investors, so it does not immediately change how ordinary retail investors buy corporate bonds.
However, the broader initiative could eventually support wider participation if the technology and regulatory framework prove effective.
SEBI and RBI are using the pilot to assess whether tokenisation can deliver faster settlement, better transparency and lower operational risks while maintaining regulatory safeguards.
Future applications could extend beyond corporate bonds to other financial assets.
