India Launches Tokenization Pilot for $620 Billion Corporate Bond Market

Odaily reports: The Securities and Exchange Board of India (SEBI), in collaboration with the Reserve Bank of India (RBI), has launched the "Demat 2.0" pilot to issue and settle corporate bond tokens on permissioned ledgers operated by NSDL and CDSL, covering a corporate bond market of approximately $620 billion.

State-owned lender REC, Larsen & Toubro, and non-bank lender IIFL Finance have collectively raised approximately $107 million through this framework. The system connects to the RBI's wholesale digital rupee to enable simultaneous settlement of bonds and funds, and automates interest payments and redemptions via smart contracts.

SEBI stated that the legal terms, credit ratings, trustee arrangements, listing rules, and investor protections for tokenized bonds remain unchanged. Investors can hold tokens in their existing Demat accounts, with secondary trading and retail participation to be introduced in subsequent phases. (Decrypt)