India’s National Securities Depository Limited (NSDL) has launched Demat 2.0, a blockchain-based platform designed to support tokenized securities and enable near-instant settlement using the Reserve Bank of India’s wholesale central bank digital currency (CBDC).

The platform was unveiled at the Global Fintech Fest 2026 by RBI Governor Sanjay Malhotra and Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey. The launch marks another step in India’s effort to apply blockchain technology to financial market infrastructure.

Pilot involves ₹1,025 crore in tokenized bonds

Demat 2.0 uses two interconnected digital wallets: one for security tokens and another for CBDC-based payments. Its architecture is designed to allow securities and funds to move simultaneously through atomic settlement.

Under this structure, a tokenized bond and its corresponding payment are transferred at the same time. This reduces the settlement risk that can arise when delivery of an asset and payment occur separately.

The platform’s primary objective is to combine tokenized securities with wholesale CBDC settlement, creating a faster and more synchronized mechanism for securities-market transactions.

The pilot has involved companies including REC Limited, Larsen & Toubro and IIFL. Together, the participating issuers raised about ₹1,025 crore through tokenized bonds, providing an early example of blockchain-based debt issuance in India.

The initiative also aims to reduce operational friction by using existing customer-verification processes. Investors do not need to open separate accounts specifically for the pilot because the system can rely on their existing know-your-customer (KYC) credentials.

The initial implementation is focused on bonds. Its scope could expand to other types of securities as regulatory frameworks develop and the market gains more experience with tokenized financial assets.

Smart contracts may automate bond servicing

Another potential feature of Demat 2.0 is the use of smart contracts to automate certain post-issuance activities. Subject to applicable regulations and the rules governing individual securities, programmable contracts could support functions such as interest payments and bond redemptions.

This type of automation could reduce manual processing while improving the consistency and timing of recurring financial transactions. For issuers, it could streamline administrative work. Investors could also receive more automated servicing for tokenized assets.

Smart-contract functionality could eventually enable routine bond payments and redemptions to be executed automatically, potentially reducing operational costs and improving efficiency for issuers, investors and market intermediaries.

Using wholesale CBDC as the settlement asset also gives the platform a direct connection to central bank-issued digital money instead of relying solely on conventional payment rails. This could support a more integrated environment in which ownership records, securities transfers and settlement funds are handled through connected digital infrastructure.

The launch comes as financial institutions worldwide examine tokenization as a way to modernize securities issuance, settlement and asset servicing. India’s approach combines distributed-ledger technology with established regulatory and market infrastructure, allowing tokenized assets to be tested without requiring participants to abandon existing compliance systems.

The Demat 2.0 pilot shows how blockchain and central bank digital currency can be combined within regulated financial infrastructure. The model has the potential to shorten settlement cycles and reduce transaction-related risks, although further expansion will depend on regulatory approvals, market adoption and the platform’s ability to demonstrate reliable performance at greater scale.

For now, Demat 2.0 remains focused on tokenized bonds, providing a controlled environment to test how blockchain-based securities can operate alongside India’s existing financial market framework.