The Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) have officially launched the Demat 2.0 pilot, a regulated infrastructure for tokenized corporate bonds that settles transactions using the RBI’s wholesale central bank digital currency. The project was announced on September 10, 2026, at the Global Fintech Fest in Mumbai by SEBI Chairman Tuhin Kanta Pandey and RBI Governor Sanjay Malhotra.
Under the pilot, three issuances have already been completed, totaling ₹1,025 crore, approximately $116 million. State-owned REC Limited completed the first native distributed-ledger corporate bond issuance on September 7, raising ₹500 crore from 18 investors. The bond carried a 7.30% coupon and a maturity of one year and nine months; REC initially offered ₹100 crore with a ₹400 crore greenshoe option and received ₹796 crore in bids. Larsen & Toubro followed on September 9 with a ₹500 crore bond purchased by four investors, while IIFL Finance issued ₹25 crore to a single investor on the same day.
Demat 2.0 does not create a new category of security. Tokenized bonds retain their fixed interest rate, maturity date and legal rights, and existing requirements covering credit ratings, debenture trustees, exchange listings and disclosure continue to apply. Ownership records sit on a distributed ledger maintained by India’s regulated depositories, while investors hold securities through existing demat accounts. Participation requires activation of Demat 2.0 access and a wholesale digital rupee wallet with a participating bank.
The system connects the depository ledger to the RBI’s wholesale digital rupee through the Unified Market Interface. This enables atomic settlement, meaning delivery of the tokenized security and payment in digital rupees occur as one transaction. SEBI said the structure removes settlement risk and allows issuers to receive funds on the bidding day, compared with two to three days under the conventional process. Corporate actions such as coupon payments and redemptions can be programmed through smart contracts, reducing manual reconciliation and validation work.
Later phases of the pilot are expected to add secondary trading through existing request-for-quote platforms and eventually retail access. SEBI has not yet announced timelines for those phases or committed to a full rollout beyond the pilot. India’s approach uses central bank money rather than privately issued stablecoins or other digital assets, keeping the pilot separate from public cryptocurrency markets and decentralized exchanges.
