MUMBAI, Sept 10: The Reserve Bank of India and the Securities and Exchange Board of India have launched a pilot programme to explore the tokenisation of corporate bonds, marking a major step towards using blockchain technology and central bank digital currency in India’s securities market.
The initiative, called ‘Demat 2.0’, was announced at the Global Fintech Fest in Mumbai. It seeks to modernise the settlement and servicing of securities by combining tokenised assets with digital settlement infrastructure.
The pilot involves several major financial institutions and market infrastructure providers, including CDSL, NSDL, BSE, NSE, HDFC Bank, ICICI Bank and NPCI.
The programme began with three bond issuances, including a Rs 500 crore issue by Larsen & Toubro that attracted institutional investors.
Under the new framework, tokenised securities can be settled using CBDC, while blockchain based smart contracts can automate parts of the post-issuance servicing process.
Officials said the technology could improve transaction security, reduce settlement times and strengthen record-keeping across the securities ecosystem.
Tokenisation could also make certain high value financial assets easier to divide into smaller units, potentially broadening access to investment products in the future.
The initiative builds on India’s dematerialisation journey that began with the original demat system in the 1990s. Authorities indicated that the technology could eventually be extended beyond corporate bonds to other financial assets, including equities, mutual funds and gold.
The pilot is expected to provide regulators and market participants with practical experience in assessing the benefits and risks associated with tokenised securities before any wider rollout.