SEBI and RBI launch 'Demat 2.0': corporate bonds issued as tokens and settled in wholesale digital rupee

The Securities and Exchange Board of India announced the launch of 'Demat 2.0', a pilot for tokenising corporate bonds. RBI Governor Sanjay Malhotra and SEBI Chairman Tuhin Kanta Pandey announced it jointly at the Global Fintech Fest in Mumbai. Under the pilot, a bond is created as a digital token on a distributed ledger owned by the depositories. The ledger is linked to the RBI's wholesale central bank digital currency through the RBI's Unified Market Interface.

This allows atomic settlement, in which the bond and the money move at the same instant, removing settlement risk. Smart contracts pay interest and redemption amounts automatically into bondholders' CBDC wallets. SEBI said India is the first country to issue corporate bonds natively on a distributed ledger, with ownership recorded by statutory depositories and payment settled in central bank digital currency, within existing regulated infrastructure. Three issuers, REC Limited, L&T Limited and IIFL, raised ₹1,025 crore in total between 7 and 9 September 2026.

SEBI stressed that only the recording technology changes. The bond remains the same instrument in law, investor rights and the issuer's obligation to repay are unchanged, and rules on credit rating, debenture trustees, listing and disclosure continue to apply. Investors hold the tokens in their existing demat accounts without fresh KYC. Later phases will add secondary trading and retail access.