India has completed three tokenized corporate bond transactions worth ₹1,025 crore, or about $116 million, under its Demat 2.0 pilot, according to the Securities and Exchange Board of India. The deals were settled using the Reserve Bank of India’s wholesale digital rupee, marking an early test of how tokenized securities and central bank digital money can work together in the local bond market.
On Sept. 10, SEBI said the pilot links a distributed ledger operated by India’s statutory depositories with the RBI’s Unified Market Interface. In this setup, the bond and the payment move together through atomic settlement, a mechanism designed to complete both sides of the transaction at the same time.
Three issuers completed the first bond deals
The pilot’s first phase has focused on primary issuance of corporate bonds, and three companies have already used the system. State-run REC opened the program with a ₹500 crore transaction on Sept. 7 in what SEBI described as India’s first native distributed-ledger corporate bond issuance.
REC’s sale drew bids totaling ₹796 crore from investors, above the amount ultimately issued. Larsen & Toubro then completed the second transaction on Sept. 9, raising ₹500 crore from four investors. A third deal followed the same day, with IIFL issuing ₹25 crore to a single investor.
Total participation reached 23 investors
Across the three transactions, 23 investors took part. The largest individual allocations came from the REC and Larsen & Toubro deals, which together accounted for ₹1,000 crore of the ₹1,025 crore total issued in the pilot so far.
SEBI’s update indicates that the transactions were executed within a regulated framework rather than through a separate experimental market. The emphasis in the first stage has been on testing issuance and settlement mechanics, rather than building a new venue for bond trading from scratch.
How the digital rupee is used in settlement
Under the Demat 2.0 design, tokenized corporate bonds are recorded on a distributed ledger linked to the RBI’s wholesale central bank digital currency infrastructure. Payment is made through the RBI’s Unified Market Interface, allowing the transfer of securities and funds to be synchronized.
SEBI said this atomic settlement model moves the bond and the payment together. The structure is intended to reduce settlement friction by ensuring that delivery of the security and delivery of funds happen in a single coordinated process.
Next phases will add trading and retail access
SEBI said later phases of the pilot will expand beyond issuance. Tokenized bonds are expected to be connected to existing request-for-quote platforms so that secondary trading can take place within the current regulated market structure.
The regulator also said sellers in the secondary market could receive digital-rupee funds immediately, instead of waiting the previous two to three days for settlement. Retail participation is planned for a later stage, though SEBI did not provide a date in the announcement.
Source: crypto.news