The Securities and Exchange Board of India (SEBI) and Reserve Bank of India (RBI) have announced the launch of Demat 2.0, a pilot initiative to test tokenisation of corporate bonds using digital currency and distributed ledger technology. According to reports from The Financial Express, the initiative was announced by SEBI chairman and RBI governor at the Global Fintech Fest in Mumbai on September 10, 2026. The pilot aims to speed up the issuance and settlement process in securities markets by creating bonds as digital tokens on a Distributed Ledger Technology (DLT) network.
The Demat 2.0 system operates through a Wholesale Central Bank Digital Currency (CBDC) framework, where bond transactions involve both securities and money legs. As reported by The Financial Express, the bond token lives on the depositories' DLT ledger while payments move through the CBDC system, with the two connected via RBI's Unified Market Interface (UMI). This enables automatic settlement of bond and cash movement as a single linked transaction, resulting in no counterparty risk and zero-lag settlement. The system maintains atomic settlement linking both securities and funds, reducing the conventional two to three-day settlement period to immediate processing.
The Demat 2.0 pilot follows a three-stage implementation approach. According to The Financial Express, Stage I currently involves three companies issuing tokenised bonds through the Electronic Bidding Platform (EBP), with issuances limited to institutional investors. Stage II will introduce secondary trading and retail access via the Request for Quote (RFQ) platform, providing retail investors access to both primary and secondary markets. Stage III will extend ledger nodes to depository participants, credit rating agencies, and other regulated entities, with automated corporate action benefits and access to other instruments.
The initiative offers significant advantages for both issuers and investors, as reported by The Financial Express. Issuers benefit from lower issuance costs, faster issuance by reducing file-sharing, reconciliation, and validation, with funds received on the same day bidding closes compared to conventional two to three-day processes. Investors can receive funds immediately by selling in secondary markets, with smart contracts ensuring interest and redemption payments are credited to the bondholder's CBDC wallet. The system maintains the same bond characteristics as conventional bonds, including bond price, debenture trustees, credit rating, coupon rate, and ISIN, while remaining securities under the SCRA, 1956.
India's Demat 2.0 approach follows similar international initiatives, with the Swiss National Bank's Project Helvetia testing settlement assets across six digital exchanges and the Hong Kong government issuing tokenised Green Bonds since 2023. As reported by The Financial Express, the USA issues treasury securities in similar manner, with asset managers like BlackRock building tokenised funds using JPMorgan's Kinexys platform. India's approach differs in that bonds are issued natively on a shared ledger controlled by SEBI-recognised depositories rather than private platforms used in other countries. The initiative operates under SEBI's regulatory sandbox, with potential for demonstrating effective integration of national depository systems and central bank digital currencies to strengthen market infrastructure.
