India's RBI and SEBI Roll Out "Demat 2.0" Pilot to Tokenise Corporate Bonds and Enable Digital Settlement

India's Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) have launched "Demat 2.0," a pilot programme to test tokenised corporate bonds and faster settlement using blockchain technology and central bank digital currency (CBDC), The Indian Express reported. Unveiled on Sept. 10 at the Global Fintech Fest in Mumbai, the pilot opened with three bond issuances, including a Rs 500 crore Larsen & Toubro transaction backed by investors such as SBI, Axis Bank, SBI Mutual Fund and NSDL. SEBI Chairman Tuhin Kanta Pandey said the initiative will assess whether distributed ledger technology can more tightly link the securities and settlement legs of transactions, shorten settlement cycles and automate parts of asset servicing. Participants include CDSL, NSDL, BSE, NSE, HDFC Bank, ICICI Bank and NPCI. The project builds on the original Demat system launched in 1996, which shifted shareholding from paper certificates to digital records. Under "Demat 2.0," tokenised securities are paired with digital settlement assets and smart contracts, with CBDC used for settlement. Pandey said the framework is designed to preserve legal certainty around ownership while introducing new market infrastructure. The model could be extended to equities, mutual funds and gold. Commercial papers and certificates of deposit already use tokenised formats via the unified markets interface and CBDC. RBI Executive Director P. Vasudevan said the central bank is also reviewing gold tokenisation. Tokenisation involves splitting financial assets into smaller digital units, a structure that could lower the cost of ownership and broaden access for retail investors. A Rs 10 lakh bond, for example, could be broken into Rs 100 units. Officials also see digitisation as a way to strengthen ownership records and reduce settlement time. RBI Governor Malhotra said at the event that India could help shape the future architecture of global finance and position itself as a trusted partner. The RBI is also building digital public infrastructure, including the ULI, intended to provide common rails for consent-based credit delivery on a model similar to the Unified Payments Interface.