Sebi’s Demat 2.0 pilot brings tokenised corporate bonds to India’s bond market
Key Takeaways
- •Sebi has introduced Demat 2.0, a pilot program that applies tokenisation to corporate bonds to streamline transactions and improve settlement.
- •Smart contracts in the pilot automate interest payments and principal redemption, reducing reliance on manual processing.
- •The initiative uses atomic settlement, releasing bonds and funds simultaneously to eliminate settlement risk.
- •Three issuers have so far raised a combined Rs 1,025 crore through the tokenised bond framework.
- •Future development is expected to expand the system to secondary-market transactions and individual investors.
India’s Securities and Exchange Board of India (Sebi) has launched Demat 2.0, a pilot initiative focused on tokenising corporate bonds. The programme is designed to streamline bond transactions and improve the settlement process for investors.
Under the pilot, investors can gain faster access to funds after selling bonds. Interest payments and principal redemption can also be automated through smart contracts, reducing the need for manual processing.
Demat 2.0 uses atomic settlement to coordinate the delivery of bonds with the corresponding payment. By linking the two legs of a transaction, the mechanism is intended to eliminate settlement risk: the bonds and funds are released seamlessly at the same time.
The pilot has already involved three issuers, which have raised a combined Rs 1,025 crore through the tokenised bond framework.
The initiative represents India’s approach to applying tokenisation to the corporate bond market. Future developments are expected to extend the system’s use to secondary-market transactions and make it available to individual investors.
The pilot was reported by Economic Times Markets.
